Nigeria’s inflation continues upward trend to 33.69% in April

Nigeria's headline inflation continued its upward trend, reaching 33.69 per cent in April, with food inflation soaring to 40.453 per cent. As the Monetary Policy Committee (MPC) prepares to convene next week to address the latest inflation numbers and the depreciation of the naira, concerns about the country's economic stability are mounting. Femi Oladehin, a Partner at Argentil Capital Partners, recently shared insights on these issues in an interview with CNBC Africa. Oladehin expressed his reaction to the inflation figures by stating that they were largely in line with expectations. He emphasized his belief that inflation is unlikely to peak until the second half of 2024, making the Central Bank's target of 21 per cent by December unattainable. Key drivers of inflation such as food prices and the exchange rate show no signs of easing, posing a significant challenge for the Central Bank's policy decisions. The current economic landscape in Nigeria is characterized by a cost of living crisis, with inflation, exchange rate volatility, high energy costs, and a weakening currency exerting pressure on the average Nigerian's purchasing power. Oladehin highlighted the significant impact of these factors on the middle class, leading to wealth erosion and a stark divide between the very rich, the poor, and the extremely poor segments of society. Addressing the policy response to the economic challenges, Oladehin underscored the importance of fostering private sector growth and industrial development to drive productivity and counter the stagflation environment. He criticized the government's focus on revenue generation over growth-oriented policies, emphasizing the need to prioritize job creation and economic revitalization. Regarding the upcoming MPC meeting, Oladehin anticipated that the Central Bank is likely to maintain high interest rates in response to persistent inflation levels. He cautioned against further rate hikes, citing the detrimental impact on the economy and urging a shift towards pro-growth strategies. Oladehin advised a cautious approach, suggesting that monitoring market trends for signs of inflation deceleration should guide future policy decisions. In conclusion, Oladehin emphasized the importance of restoring Nigeria's growth trajectory, rebuilding the middle class, and enhancing productivity as key pillars for economic recovery. By prioritizing sustainable growth and ignoring external pressures, Nigeria can chart a path towards long-term economic stability and prosperity.