Nigeria's inflation rate was only marginally up at 8 percent in December, completing a second year in single digits despite a sharp fall in the naira currency following a devaluation. The figure compared with compared with 7.9 percent the previous month. Food inflation was also almost steady, with prices rising 9.2 percent, compared with 9.1 percent in November.
The central bank devalued the naira by 8 percent at the end of November to try to halt the decline in its foreign exchange reserves, which had been hit by falling world oil prices. The allure of Africa's biggest economy to foreign investors has been growing, especially for buyers of its attractively priced debt, but worries are mounting over the economic impact of a 60 percent fall in oil prices since their June peak.
A sharp rise in inflation would have been an added headache for President Goodluck Jonathan a month before a closely fought election in which his record on security, corruption and the economy is at stake. The currency fell sharply at the end of November, and for most of December was trading well below the bank's target band of 160-176 against the dollar.
Many analysts feared downward pressure on the naira in a country that imports 80 percent of what it consumes would stoke inflationary pressures. The latest figures suggest those fears have not yet been realised, although price pressure could still feed through in the first few months of this year. "This implies that inflation has held in the single digit range for twenty four consecutive months," the bureau said. "In December, the faster pace of price increases recorded by the headline index was as a result of advances in a broad array of divisions," the bureau said.
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