Already contending with the possible risk of price rises due to an increase in spending ahead of February’s presidential election, Nigeria may face higher inflationary pressures due to the recent drop in the price of crude oil, analysts have said.

According to Bloomberg, experts believe that the higher inflation risks could push Africa’s central banks to tighten monetary policy. “The oil plunge could accelerate inflation in Africa’s largest crude producer as it hits foreign-exchange revenue and adds to pressure on the naira. Higher spending ahead of February’s presidential election already poses price risks,” the news agency stated.

The news agency pointed out that inflation has been above the Nigeria’s monetary authorities’ target for more than three years, noting that three of 10 Monetary Policy Committee (MPC) members voted for higher rates in September, with Central Bank of Nigeria (CBN) Governor , Mr. Godwin Emefiele saying an increase is “likely soon.”

Source: New Telegraph