Nigeria's Inflation Rate Rises in September

By Elisha Bala-Gbogbo

ABUJA (Reuters) – Nigeria's inflation rate rose in September for the first time in three months, advancing to 32.70% in annual terms from 32.15% in August, according to the statistics agency on Tuesday.

Analysts had predicted that the inflation slowdown in July and August might be short-lived, especially after three petrol price increases since early September, which have affected citizens facing the worst cost-of-living crisis in a generation.

This renewed rise in inflation raises the prospect that the central bank may continue its rate-hiking cycle, following five hikes so far this year. The Central Bank of Nigeria is set to announce its next rate decision on Nov. 26.

The petrol price increases are part of President Bola Tinubu's government's efforts to exit a costly fuel subsidy program that has burdened Africa's most populous nation financially.

Other reforms initiated by Tinubu to stimulate economic growth and attract investment include devaluing the naira currency, which has also contributed to inflationary pressures, alongside crop damage caused by floods in food-producing regions.

Data from the National Bureau of Statistics on Tuesday indicated that food inflation rose to 37.77% year on year in September from 37.52% the previous month.

Economists anticipate that the disinflation process could resume in the coming months, which may allow the central bank to shift from a hiking to an easing cycle early next year.