Nigeria’s headline inflation decline for the first time in 15 months, showing 17.78 percent year on year in February, from 18.72 percent posted in January, is a sign of price stability says Lukman Otunuga.
Otunuga, a research analyst with Forex Time, writes in an email to Nigeria Communications that the rising confidence towards Nigeria’s economic recovery was boosted on Tuesday following reports of the nation’s inflation declining.
According to the latest report released by the National Bureau of Statistics (NBS) on Tuesday, food inflation rose to 18.53 percent year- on-year from 17.82 percent and 1.99% month-on-month from 1.29 percent in January.
Core inflation declined to 16.0 percent year-on-year in February from 17.9 percent.
Urban inflation fell to 18.57 percent year-on-year from 20.31 percent, while rural inflation dipped to 16.98 percent from 17.34% in January
Otunuga said, “The rising confidence towards Nigeria’s economic recovery was boosted on Tuesday following reports of the nation’s inflation declining for the first time in 15 months at 17.78% in February. This encouraging sign of returning price stability could boost investor sentiment as the nation tackles a fierce currency crisis and dollar shortages.
“With the recent increase in Dollar sales to importers boosting the Naira further on the black market exchange, the closing disparity between the black market and official exchange could quell the cost-push inflation scenario consequently reducing inflationary pressures.
“It must be kept in mind that Nigeria remains on a quest to achieving economic sustainability and such may become a reality if the current upside momentum holds.
“If inflation continues to recede this year as the nation attains economic stability and bridges the disparity between the exchanges, then the 15.74% forecasted year-end figure could edge closer to reality”.