Nigeria’s Inflation Rate Jumps To 27.33% Following Fuel Subsidy Removal

The fuel subsidy removal continues to haunt Nigerians as the country's inflation rate jumped 27.33% last month. Rising food prices also helped push the rate higher.

Inflation in Nigeria reached 27.33% in October from 26.72% in September, according to a report published Wednesday by the National Bureau of Statistics (NBS).

While the surge between September and October was 0.61%, the headline inflation rate was 6.24% points higher compared to the rate recorded in October 2022 (21.09%).

"The food inflation rate in October 2023 was 31.52% on a year-on-year basis, which was 7.80% points higher compared to the rate recorded in October 2022 (23.72%)," the report said. "The rise in food inflation on a year-on-year basis was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables and milk, cheese and eggs."

The cities of Kogi (41.74%), Kwara (38.48%) and Lagos (37.37%) recorded the highest food inflation rate on an annual basis, while Borno (24.41%), Kebbi (24.90%) and Jigawa (25.10%) recorded the lowest rate.

Previously, the Nigerian Red Cross Society (NRCS), a humanitarian organization, pointed out that food insecurity in Nigeria was threatening the country's peace and stability.

Oluyemisi Adeaga, the president of NRCS, said the rising food insecurity could lead to national security issues as many Nigerians were not sure if they will be able to have their next meal or not.

In July, thousands of youth attacked the National Emergency Management Agency warehouses in the states of Kaduna and Adamawa when food and fuel prices skyrocketed after President Bola Tinubu announced fuel subsidy removal.

Tinubu's announcement came on May 29 during his presidential inauguration. Since then, petrol prices hiked from N195 per liter to N600 per liter. Following the subsidy removal, transport company Uber hiked its fares to ensure that drivers can cover their fuel costs and deal with inflation.

The government also implemented a 7.5% VAT (Value Added Tax) on AGO (Automotive Gas Oil), popularly known as diesel.

Before Tinubu became president, the country was going through a cash crisis as a new currency redesign policy mopped up over 70% of cash in Nigeria, causing an estimated loss of N20 trillion.