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Nigeria Inflation Rate Drops to 15.99% in October as Food Prices Ease

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Nigerian inflation slowed to a 10th-month low in October, giving the central bank scope to leave interest rates on hold next week.

Consumer prices increased 15.99% from a year earlier, compared with 16.63% in September, Statistician-General Simon Harry told reporters Monday in Abuja, the capital. The median estimate in a Bloomberg survey of seven economists was 16.2%.

While inflation has exceeded the 9% ceiling of the central bank’s target band for more than six years, the sustained slowdown in price growth may give the monetary policy committee room to hold rates and aid the economy’s rebound from last year’s coronavirus-induced contraction. Economic output in Africa’s biggest oil producer has lagged the pace of population expansion of about 2.6% every year since crude prices fell in 2015.

Central bank Governor Godwin Emefiele has previously said the MPC will only make policy adjustments once the economy’s recovery is on a sustainable path. The median estimate of 11 economists in a Bloomberg survey is for interest rates to start rising in the first quarter of next year.

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The central bank will announce its interest-rate decision on Nov. 23.

The deceleration in inflation was largely helped by annual food-price growth, which slowed to 18.3% from 19.6% in September. Core inflation, which excludes farm produce, eased to 13.3%, compared with 13.7% in the previous month.

The slowdown is expected to continue unless there’s a shock in the system, Harry said.

Africa’s largest economy has struggled to overcome a more than decade-long Islamist insurgency in the northeast and bandit attacks in the northwest that have disrupted farming and displaced millions.

“Security challenges in key food-growing regions will keep a floor on further price declines,” said Ikemesit Effiong, head of research at SBM Intelligence, ahead of the release.

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