By Aliyu Galadima
A report published by the Central Bank of Nigeria has indicated that the country’s inflation is too high for consumers to survive, making them to demand interest rate cut.
The apex bank’s inflation expectation survey for August 2024 revealed this development.
The survey sampled opinions on how businesses and households perceive current and future inflation trends and the major drivers of inflation. Nigeria’s inflation rate rose to 33.4% year-on-year.
But the CBN has battled inflation with monetary policy rate hikes, which reached 26.75% in July 2024.
Nigeria’s inflation jumped after the bank floated the naira in June 2023 a month after President Bola Tinubu removed subsidy on petrol.
These have led to hardships and severe economic setbacks in Africa’s most populous nation.
Consequently, the CBN said overall perception on inflation rate in August showed that 84.9% of the respondents were of the view that the current level of inflation was too high, culminating to an index of -63.2 points.
A breakdown of the responses indicates that businesses at -61.2 points are slightly more optimistic than households, which scored -65.2 points.
A further breakdown shows that the micro businesses showed the least pessimism with -58.2 index points.
The major factors that played a crucial role in shaping the perception about inflation among both businesses and households were energy cost, transportation, and exchange rate.
Based on the report, 68.7% of the respondents prefer the CBN to reduce interest rate, while 15.4% expect the interest rate to be raised.
The remaining 15.9% preferred the rates to remain unchanged.
According to the report, respondents expect the inflation rate to gradually abate over the next six months as their indices showed considerable improvement over the review periods.
Businesses anticipate lower inflation rate compared to households, the apex bank disclosed.
