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Nigeria’s inflation peaked at record 28-year high in June at 34.19%

Published

5 months ago

July 15, 2024

Nigeria’s inflation rate rose to a new 28-year high of 34.19% in annual terms in June, official data showed on Monday, but some analysts said it may have peaked as devaluation effects should start to fade from this month.

June’s data marked the 19th straight month that inflation had risen in Africa’s most populous nation, up from 33.95% in May.

It came roughly a week before the central bank is due to announce another interest rate decision, which will be closely watched after three hikes already this year.

President Bola Tinubu’s policies, which include cutting back on energy and gasoline subsidies and depreciating the naira twice a year, have increased price pressure.

The largest cost-of-living crisis in decades is plaguing millions of people as a result of the reforms, which have harmed the poor.

After calling off an indefinite strike last month, labour organizations met with Tinubu this week to advocate for a new minimum wage. According to data released on Monday by the National Bureau of Statistics, the largest contributors to inflation in June were still food and non-alcoholic beverages. Inflation on food increased to 40.87% from 40.66% in the prior month.

Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has declared that the bank will take all necessary steps to control inflation.

The Capital Economics analyst for Africa, David Omojomolo, predicted that inflation would begin to decline soon—likely in July—and fall below 30% by the end of the year.

“This, we think, will set the stage for the CBN to start thinking about interest rate cuts soon,” he wrote in a research note.

At its most recent monetary policy meeting in May, the central bank increased the prime lending rate to 26.25%, a 150 basis point increase. It must make a rate decision again by July 23.

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IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

1 day ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

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Libya’s eastern govt accepts petrol subsidy elimination

Published

1 day ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.