Inflation higher before Impact of Subsidy Removal and FX rate Convergence


  • Inflation rises to a new high of 22.41% in May from 22.22% in April 2023
  • The FGN has taken two key decisions relating to subsidy removal and FX convergence that have the potential of placing the economy on a sustainable long term macroeconomic growth path but will come with short-term costs to households, though net effects are positive in the long term.
  • The combination of the subsidy removal and the reported removal of the peg on FX will likely witness a short-term increase in the monthly and yearly rate of inflation translating in an increase in headline inflation to within 24.4% to 25.6% for June and July 2023.


The Consumer Price Index (CPI), which measures the costs for goods and services in the Nigerian economy for May 2023 show consumer prices rising to yet another new high.

On a year-on-year basis, the headline CPI rose to a new 2 decade high of 22.41% in May 2023 compared to 22.22% in April 2023. On a monthly basis, the CPI rose for the third consecutive time to 1.94% in May 2023, from1.91% in April 2023 and 1.71% in February 2023. This represents the highest month on month inflation rate since May 2016.

Food prices, which dominates the CPI basket, continued to rise on a yearly basis to 24.82% in May 2023 from 24.61% in April 2023, while monthly, food prices surged higher to 2.19% in May 2023 from 2.13% in April 2023.

The core CPI which excluded prices of food and energy, however declined year on year to 20.06% in May 2023, from 20.14% in April 2023, while on a month-on-month basis it rose considerably to 1.81% in May 2023 from 1.46% in April 2023.

Click here to read full publication.