NAIRAMETRICS
Nigeria recorded an annual headline inflation rate of 18.85% in 2022, in what was a remarkable year ravaged by several economic headwinds. According to the research website, Nairalytics, Nigeria experienced its worst inflation rate in the last twenty-one years.
The last time Nigeria recorded an annual inflation rate higher than 18.85% was in 2001 when the consumer price index rose by an average of 18.87%.
The African giant, just recovering from the covid-19 pandemic and the ripple effect from the #EndSARS movement in 2020, faced further hardship due to Russia’s invasion of Ukraine in February 2022 which was followed by inflationary woes.
A cursory look at the monthly trend showed that Nigeria’s inflation rate bridged a 17-year ceiling of 21.47% in November, largely attributed to the global energy crisis, depreciation of the exchange rate, food crisis, and surge in transportation cost amongst others.
Effect on poverty level: A trend analysis of the data gives an indication of how Nigeria’s inflation trended significantly upward in the last three years, increasing by over 700 basis points between 2019 and 2022.
- The rising inflationary pressure in the county pushed more Nigerians below the poverty line, as the purchasing power of citizens was severely eroded, without a corresponding increase in income level.
- The World Bank estimated that over 5 million Nigerians were pushed into poverty in 2022, bringing the total number to 95 million as of the end of the year.
- On the other hand, statistics from the National Bureau of Statistics (NBS) revealed that about 133 million were multidimensionally poor in 2022, representing 63% of the population.
Nigeria’s inflation rate leapt over 18% despite an estimated projection of 11.95% by the federal government. Considering the massive leap, it is imperative to consider the factors that shaped the movement of Nigeria’s inflationary quagmire in 2022.
Russia-Ukraine war: The year was set to be one for economic recovery and resilience, at least, according to the budget by President, Muhammadu Buhari during his presentation to the joint session of the National Assembly on 8th October 2020.
