Despite Nigeria experiencing a consecutive decline in inflation, the reduction has yet to translate into lower prices for goods and services, says Prof. Segun Ajibola, a seasoned economist and former president of the Chartered Institute of Bankers.
Speaking on Monday, Prof. Ajibola explained that it takes time for inflationary trends to reflect in consumer prices. His comments followed the latest report from the National Bureau of Statistics (NBS), which revealed that Nigeria’s headline inflation fell to 23.18% in February 2025, while food inflation dropped to 23.51%.
He attributed Nigeria’s persistent high prices to cost-induced inflation, noting that traditional monetary policies have had limited success in addressing the issue.
“Over time, monetary approaches have struggled to curb inflation due to the disconnect between market-driven monetary tools and real economic conditions,” Ajibola said.
He acknowledged that lower energy costs in February, particularly fuel prices, contributed to marginal reductions in transportation fares, food prices, and other essentials. However, he emphasized that the impact of lower inflation is not immediate due to the economic principle of price stickiness.
“In economic terms, prices are ‘sticky downward’—once they rise, they are slow to fall, and when they do, it takes time,” he added.
Ajibola urged the government to intensify efforts on the fiscal side of inflation control, cautioning that further hikes in the monetary policy rate, currently at 27.50%, would be ineffective in addressing cost-push inflation.
“Authorities at all levels are working to curb inflation, but much more is needed, especially through fiscal policies. Simply increasing interest rates won’t solve the problem,” he concluded.
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