By Milcah Tanimu

Nigeria experienced a significant uptick in inflation during February, with the rate soaring to 31.70%, marking a 1.80% increase from January’s 29.90%, according to the latest data from the National Bureau of Statistics (NBS).

This acceleration indicates a faster pace of price level growth compared to the previous month. On an annual basis, February 2024 witnessed inflation climbing by 9.79% over the same period in 2023, which stood at 21.91%.

Moreover, the month-on-month inflation rate for February 2024 reached 3.12%, up from January’s 2.64%, signifying a quicker escalation in average prices.

Despite the Central Bank’s efforts to curb inflation through tightened monetary policy, including a substantial 400 basis points increase in the benchmark interest rate to a record 22.75%, inflationary pressures persisted.

CBN Governor Olayemi Cardoso attributed the decision to hike rates to the need for anchoring inflation expectations and addressing medium-term inflation persistence concerns. The move was deemed necessary to counteract inflationary pressures driven partly by distortions in the foreign exchange market, where speculators were exerting upward pressure on the exchange rate, resulting in significant pass-through effects on inflation.

The consensus among policymakers was that a substantial increase in the policy rate was imperative to effectively combat inflation and stabilize the economy.