January inflation rises to 21.82%, amid currency redesign crisis

NIGERIA’S inflation figure rose to 21.82 per cent in January 2023, an 0.47 per cent increase on the 21.34 per cent profile recorded in December 2022, according to the National Bureau of Statistics (NBS).

The NBS, in its report for January, listed disruption in the supply of food products, increases in import cost due to naira depreciation, and a general increase in the cost of production as factors responsible for steady inflation rise in 2022.

According to the NBS Consumer Price Index (CPI), the headline inflation rate in January 2023 was, on a year-on-year basis, 6.22 per cent points higher than the rate recorded in January 2022, which was 15.60 per cent.

The report stated, “This shows that the headline inflation rate (year-on-year basis) increased in the month of January 2023, when compared to the same month in the preceding year (i.e. January 2022).”

Economic watchers fear Nigeria could risk further inflationary surge by the time the NBS first quarter report is released, with a recession likely as the currency redesign policy creates more problems and anxiety in the economy.

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“The small businesses and ordinary citizens are the biggest victims of this disruption and hardship inflicted in the economy by this poorly thought-out policy, since they are the biggest users of cash,” the Executive Director, Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said.

Yusuf described the CBN cash swap policy as greatly flawed, saying it was contributing to the economic hardship Nigerians are currently witnessing.

He did not regard the N2.6 trillion currency in circulation, as presented by the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, as one of the reasons for his naira redesign policy, too much for the Nigerian economy, which boasts a gross domestic product (GDP) of about N250 trillion.

“Any attempt to arbitrarily cut it will create a crisis. It is unacceptable that citizens are denied access to their cash deposited for purposes of cash swap. This could undermine the confidence of the citizens in the banking system and pose a major
risk to the financial inclusion objective of the CBN,” he added.

Author profile

Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.