• Nigeria's annual inflation rate reached 33.2%, the highest since March 1996
  • Food inflation in Nigeria climbed to 40% in March, the highest since August 2005
  • Corruption remains a pervasive issue in Nigeria, with politicians benefiting from connections to the oil and gas industries

Abuja - Nigeria, the largest economy in Africa, experienced a significant increase in its annual inflation rate, reaching 33.2%, the highest since March 1996, compared to 31.7% in the previous month. Throughout the period from 1996 to 2024, the average inflation rate in Nigeria stood at 13.44%. The country reached its highest inflation rate ever recorded in January 1996 at 47.56%, while it hit a record low of -2.49% in January 2000.

The surge in inflation was primarily driven by a sharp decline in the local currency and the removal of fuel subsidies. President Bola Tinubu defended the decision to eliminate petrol subsidies, emphasizing its necessity to prevent the country from facing bankruptcy.

However, this action led to a significant increase in commodity prices, causing hardships for the people. Consequently, critics of the subsidy removal argue that it was a poorly thought-out policy as just like Zimbabwe, the policy was abrupt and overnight without natinwide consuitation.

In March, food inflation, which constitutes a major portion of Nigeria's inflation basket, continued to rise and reached 40%, the highest since August 2005, compared to 37.9% in the previous month.

The annual core inflation rate, which excludes agricultural products and energy, also surged to a multi-year high of 25.9% in March. On a monthly basis, consumer prices slightly eased to 3%, down from 3.1% in February.

However, corruption has long been a persistent issue in Nigeria affecting economics of the country. In 2012, it was estimated that the country had lost over US$400 billion to corruption since gaining independence. Nigerian politicians wield significant power and wealth due to their connections with the oil and gas industries, which are controlled by the state-owned company NNPC Limited.

Oil and gas exports account for more than 90% of Nigeria's total export revenues. While many politicians have ownership or stakes in these industries, tax revenues from the energy sector are diminished, and the benefits of Nigeria's energy wealth are disproportionately enjoyed by Lagos State. Oil and gas revenues constitute the majority of the federal budget and government officials' salaries

There was hope that corruption would diminish with the assumption of power by Tinubu. However, it continues to plague the country, leading to the suspension of the Minister for Humanitarian Affairs. Corruption remains a significant challenge in Nigeria, as it does in many other African nations.