Nigeria inflation rises in June, food and healthcare cost weigh

LAGOS: Annual inflation in Nigeria rose for a 10th straight month in June, lifted by food and healthcare costs, the statistics office said on Friday, after the coronavirus pandemic disrupted logistics and the central bank weakened the currency.

Inflation climbed to 12.56%, its highest level in more than two years, from 12.4% in May, the National Bureau of Statistics said.

The central bank is due to meet on Monday to set interest rates after it last week depreciated the naira by 5.5% against the dollar on the official market, its second adjustment in six months.

Rising inflation has caused yields on Treasury bills and bonds to turn negative, a major stumbling block for the central bank's push to attract foreign inflows to support the naira and boost the economy.

The statistics office said prices of medical services, pharmaceutical products, transport and associated services, rose the most on the non-food index.

A separate index for food, which accounts for the bulk of the inflation basket, showed a price increase of 15.18% from 15.04% in May. Food inflation has been in double digits for more than three years.

The rise in the food index was caused by increases in bread and cereals, potatoes, yam and meat, fish and vegetables.

Africa's top oil exporter faces economic hardship from the coronavirus outbreak and sharp falls in crude prices, which have caused a steep decline in growth.

The government expects the economy to contract by as much as 8.9% this year.

Nigeria has more than 34,000 confirmed cases of coronavirus and 76 deaths. Most cases are in urban areas, where the brunt of price increases is felt, especially for imported drugs and food.