• Nigeria's annual Inflation rate remained high and largely unchanged across all categories in February 2023.
  • The cash crunch which has affected consumers expenditure following the earlier redesign of the naira, doesn't seem to have slowed down inflation yet, despite a 500-basis interest rate hike since May 2022 and a 235% decline in cash in circulation.
  • CBN likely to maintain its hawkish stance on rates when the MPC meets 20-21 March, while it waits to assess Q1 2023 GDP results.


The National Bureau of Statistics has published its Consumer Price Index (CPI) report for February 2023. The CPI, a closely watched gauge of inflation, showed that annual price changes remained high and rising in February. The headline CPI for February measured 21.89% (a new two decade high) compared to 21.82% in January. On a monthly basis, however, prices slowed by 1.71% compared to the January monthly rate of 1.81%.

Food prices, which dominates the CPI basket, were the largest contributor to the increase in inflation with food inflation rising to 24.35% compared to 24.32% in January, while monthly, food prices rose slower at 1.90% compared to 2.08%.

When stripping out volatile energy and food prices, core CPI slowed both on an annual and monthly basis by 18.84% (from 19.16% in January) and 1.06%(from 1.82%) respectively.


Nigeria's inflation is caused by a complex mix of demand pull and cost push factors.

Following the CBN's currency redesign policy, currency in circulation has dropped from N3.28 trillion in December 2022 to N1.38 trillion in January and estimated N982.09 billion in February 2023, representing a 235% decline. It was expected that the scarcity of redesigned notes, which caused a cash crunch in the economy since January 2023, would stimulate a slowdown in demand pull inflation, especially given the series of interest rate hikes from the Central Bank (500 basis points since May 2022). This has however, not happened yet.


This might indicate a drop in output below effective demand, despite the cash crunch, with some producers of goods and services whose activities are cash based facing challenges purchasing inputs for production or replacing their stock and distributing them across the country.

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