Nigeria’s inflation could see double digits in 2014 - CNBC Africa

Nigeria’s inflation could see double digits in 2014

Western Africa

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“It’s a year-on-year change so apart from January, for the months that had pretty low CPI figures this year, you’re going to see a reflective high figure but not as high as we had in 2012. 2014 – you’ll probably be seeing just above double digits,” Usoro Essien, the head of economic strategy at Associated Discount House told CNBC Africa on Monday.

Inflation has remained in the single digits for the seventh consecutive month in Nigeria as July’s year-on year inflation rose to 8.7 per cent from 8.4 per cent in June.

This has been partly attributed to food inflation, which has risen to 10 per cent for the second consecutive month.

“The inflation figures have been in line with our projections for about seven months now. What you can actually see is because it’s a year-on-year measure, the effects of the core inflation last year – basically the cost of reforms – is what we’re seeing coming into play,” said Essien.  

“Going forward you expect single digit inflation below the nine per cent levels for the rest of the year.”

Essien believes that Nigeria will see an improvement in inflation as soon as the middle of the fourth quarter but insists that there’s no room for easing.

“Inflation figures are very encouraging and you would believe they’ll want to ease with these kinds of figures, however, the tailwinds from liquidity are still there and with government spending bound to reduce early next year, you don’t see any room for easing.”