Dear Subscriber,

Our recent market survey points to a further build-up in inflationary pressures due to several factors ranging from a 20.4% increase in PMS price to supply disruptions that are pushing up food prices. The blended exchange rate that manufacturers are being forced to use, due to the CBN’s forex rationing, is also adversely affecting consumer prices. Therefore we are projecting a further rise towards the 13% threshold in July (12.8%).

Nigeria is not an inflation outlier in the African continent. Ghana, Angola and Uganda are also recording higher inflation rates mainly due to food pressures. The EIU is forecasting that inflation in the African region will climb from 7.9% to 8.4% in 2020. Most African central banks are maintaining status quo or adopting an accommodative stance in spite of higher inflation. This is primarily because of the need to ameliorate the pandemic effect on growth and unemployment.

In this publication, the FDC Think Tank shares its estimates for July inflation and likely policy reactions.

Do enjoy your read…