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Buhari Leaves Inflation At Highest In 17 years, Over Double Its Level In 2015

President Muhammadu Buhari


On May 29, President Muhammadu Buhari will leave behind an inflation rate of 22.22 per cent (the highest in about 17 years), which is well over double of the level he met in 2015.

The National Bureau of Statistics (NBS), yesterday, released the last consumer price index (CPI) in the life of the current administration, showing headline inflation of 22.22 per cent. Whereas the high inflation rate is often blamed on food and energy cost, core inflation, which strips out volatile items, including food, remained elevated at 20.14 per cent.


Month-on-month change, which underpins the current strength of the price crisis, was 1.91 per cent. That suggests Nigeria may have a long way to go on inflation except drastic measures are taken.



In April 2015, a month before Buhari assumed, the headline inflation reading was 8.7 per cent. The following year, it spiked into the double-digit range and remained in the range since then.

With the monetary policy rate (MPR) now 18 per cent, commercial loans are in the region of 28 and 33 per cent.


According to figures released by the NBS, inflation went up from 22.04 per cent to 22.22 per cent in April in continuation of its upward trend.


The Chief Executive Officer of Dairy Hills Limited, Kelvin Emmanuel said the fact that other banks charge above 30 per cent is killing businesses, slowing purchasing power, limits manufacturing as a result of the high cost of borrowing, companies owing banks have seen the interest on existing loans rise, and companies that need fresh loans to operate are having to look to the debt capital markets for commercial notes, corporate bonds that are cheaper.


He accused the Senate and House of Representatives committees on Banking and Finance of complicity and inaction, saying: “Why is there no standard loan document or provision in the Bank and Other Financial Institutions Act (BOFIA 2020) to address the terms outside the MPR and one per cent base charge called the standard lending facility rate to banks, origination fees for vetting new loan requests, documentation fees for appraisal and title work after approval is given in principle, commitment fee, the bank interest rate that is determined by the cost of funds, the credit rating of the applying customer. ”


An investment banker, Sola Akinwumi, advocated a standard loan document that outlines specific customer profiles for the Bankers’ Committee on the cost of funds to the banks, and how much interest it is allowed to mark up to the borrowing customer, or different categories of ratings for a customer and what interest each risk profile attracts.


Indeed, the cost of capital amongst several other extenuating factors is the reason, for instance, why MTN would have an Average Revenue Per User (ARPU) of $17 in Nigeria, but an ARPU of $6.20 in South Africa.


The high cost of borrowing was supported by the report from the International Telecom Union (ITU), which found that the cost of borrowing is the reason ARPU is among the costliest in the world.

President All Farmers Association of Nigeria (AFAN), Kabir Ibrahim, who spoke with The Guardian in a telephone interview said the persistent rise in food, with year-on-year (Y/Y) change in the segment standing at 24.61 per cent last month, is driving more families into hunger.


According to him, though food inflation is a global one because of the unabated effects of COVID-19 and the Russia-Ukraine conflict, Nigeria’s case is exacerbated by the weak purchasing power of the naira and insecurity that has forced farmers to abandon their farms.


“The cost of inputs, especially fertilizers, has gone beyond the reach of an average Farmer. Again our infrastructure like power to preserve perishable food items is a problem. There is also a high cost of transportation of the agricultural produce from where they are produced to the market due to bad roads and the high cost of diesel. All these add to the cost of the produce in the market.”


He said the rising food prices have increased the pressure on families as they struggle with other socio-economic challenges.


He advised that the way out of the problem is to revamp the entire economy and make more investments in the agricultural sector to encourage more people to go into farming.


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