Nigerian Inflation Rate Drops to Lowest in Almost 5 Years

Nigeria’s inflation rate fell to the lowest in almost five years in March as the impact of higher fuel prices a year ago fell out of the calculation.

Inflation in Africa’s largest oil producer eased to 8.6 percent from 9.5 percent in February, the Abuja-based National Bureau of Statistics said today in an e-mailed report. The median estimate of 10 economists surveyed by Bloomberg News was 9 percent. Prices rose 0.7 percent in the month.

The Central Bank of Nigeria has kept its benchmark policy rate at a record 12 percent for nine consecutive meetings to keep prices in check and bolster the naira. The inflation rate has been below 10 percent, matching the central bank’s target, for three consecutive months.

Inflation will probably remain between 9 and 11 percent this year, central bank Governor Lamido Sanusi said on March 24. While Sanusi said he supports keeping the benchmark rate unchanged, more of the 12 members of the Monetary Policy Committee are pushing for rate cuts. Three MPC members voted for a reduction in the March 19 meeting, up from two in January.

The MPC will probably keep its key rate unchanged at its next meeting on May 21-22, Johannesburg-based Absa Group Ltd. (ASA) said in an e-mailed note to clients before today’s data.

The core inflation rate, which excludes agricultural products, rose 7.2 percent in March from a year earlier, down from 11.2 percent in February, the statistics office said. Food inflation eased to 9.5 percent from 11 percent.

To contact the reporter on this story: Maram Mazen in Abuja at mmazen@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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