THE Nigeria, Africa’s most populous nation, is facing unprecedented inflation, reaching an all-time high in May 2024. General inflation approached 34%, the highest rate in three decades. This alarming economic situation has had a profound impact on the daily lives of Nigerians.
One of the most striking aspects of this galloping inflation is the dizzying rise in food prices, which increased by 40.66% compared to the previous year. The prices of fish and cereals, essential for daily nutrition, have particularly exploded. But this inflation is not limited to food: the costs of transport, rent, as well as health services and medicines have also seen significant increases.
This price surge is partly due to the continued depreciation of the naira against the US dollar, a currency to which Nigeria is extremely vulnerable due to its heavy dependence on imports. The weakening of the local currency has therefore exacerbated inflation, making imported products even more expensive for Nigerian consumers.
Faced with this crisis, the Central Bank of Nigeria attempted to control inflation by repeatedly increasing its interest rates, from 22.75% in February 2024 to 26.25% in May 2024. However, the world Bank expresses doubts about the effectiveness of this monetary tightening policy. In its recent report on the overall economic outlook, it highlights the possibility that these measures will not be enough to contain inflation, while warning of a risk of economic stagnation for the years 2024-2025.
To help the Nigeria to stabilize its economy and support the most vulnerable sections of its population, the World Bank granted two loans totaling $2.25 billion. This program aims not only to strengthen foreign exchange reserves and stabilize the naira, but also to encourage the diversification of income away from the oil sector.
THE Nigeriaconsidered the greatest economic power inWest Africa, plays a crucial role in the region. Rich in natural resources, particularly oil and gas, the country has developed a thriving oil industry, contributing significantly to its GDP. Lagos, its economic capital, is a dynamic center for business and finance.
