The Nigerian Economic Summit Group has said that inflation weakened the naira by 14.9 per cent, adding that the naira redesign plan of the Central Bank of Nigeria triggered the devaluation of the country’s currency.
The NESG said this in its 2023 Macroeconomic Outlook Report titled ‘Nigeria in Transition: Recipes for Shared Prosperity.’
The report reflected on the issue of inflation in the country, noting the major inflationary drivers.
Domestically, a combination of cost-push and demand-pull factors constituted significant drivers of the surge in the general price level. Some of these factors include shortage of industrial inputs, insecurity, lower agricultural productivity, the high price of fuel, logistics problems, increased VAT, increasing energy cost (electricity), and foreign exchange scarcity.
“Since the demand for necessities is relatively inelastic – the change in demand is relatively unresponsive to the change in price – many businesses transferred additional production costs to consumers, resulting in higher overall prices for goods and services, particularly food.”
The report further noted that the purchasing power of N1000 in January 2022 fell to N851 by the end of the year.