Inflation in Africa’s largest economy and oil producer accelerated to 12.8 percent on an annualized basis, the highest since July 2012, from 11.4 percent in February. Food prices rose 12.7 percent in March from a year ago, compared with 11.4 percent in the previous month, driven up by transportation costs, the planting season and foreign-exchange movements. The Nigerian central bank has pegged the Naira at 197-199 per dollar since March last year, and restricted trading in foreign currencies, making imports more costly for a nation that’s a net importer of refined fuel and food products.
Importers struggle to access foreign exchange at the official rate, with the Naira falling to around 320 on the black market. The nation imports at least 70 percent of refined fuel, despite pumping two million barrels of crude a day, and faces fuel shortages. The central bank increased its benchmark interest rate by 100 basis points to 12 percent last month after inflation accelerated to more than 10 percent in February. Price growth has been outside the government’s 6 percent to 9 percent target band for 10 months.