Nigeria inflation reaches record high in almost six years

Nigeria’s inflation reached 13.7 percent in April, the highest in almost six years, the country’s national bureau of statistics has said.

The bureau further stated that rising fuel and electricity prices contributed to the high figures.

The bureau explained that the inflation rise is linked to the general increase in all sectors as food prices rose to about 13.2 percent in April, an increase of 0.4 percent from March.

Although an increase in petrol prices has not yet been fitted into inflation figures, a reduction in oil prices in the international market has reduced government’s revenue as 70 percent of Nigeria’s income comes from crude oil sales.

The Nigerian government scrapped fuel subsidy last week and increased petrol prices by 67 percent.

Petrol prices were already high in the black market even before the increase.

Nigeria produces about 1.4 million barrels of crude oil per day and despite importing 70 percent of its refined oil, the country still faces fuel shortages.

Some analysts suggest the official increase will add more inflation pressure and could force Nigeria’s central bank to increase interest rates.

Inflation in Nigeria has also been caused by pressure on the Naira which was slipped to its lowest level against the dollar on Monday in the non-deliverable forward market.

According to a forecast from the the International Monetary Fund, Nigeria’s economic growth will likely drop to 2.3 percent this year due to falling crude prices.

Reuters