April 16 (Lagos) - The latest data from the National Bureau of Statistics showed that Nigeria's inflation rate ticked up to 24.23% in March from 23.18% in February.
Food inflation came in at 21.79% in March according to them.
The data disappointed some analysts who expected the inflation to come in lower. Such expectations were flawed because the inflation that came down earlier this year was based on re-basing effects mostly and not any real economic factors. Yes the interest rates played a minor part in it and some prices came down marginally.
However we are yet to see major reduction in fuel prices even though the global crude oil prices have crashed over the past 10 days.
The fall in crude oil price could lead to fiscal issues as Nigeria's revenue reduces and pressure on forex grows thereby enabling inflation. Naira has weakened against the US Dollar even though the US Dollar has weakened against other major currencies. That is a worry sign for the economy and some analysts are already changing their models and forecasts as they all turned out to be "wishful thoughts".
Real analysts that they OG's warned investors about these emerging dangers many months ago and positioned accordingly. All this is not a surprise, it was expected. If you believed that inflation actually came down, then you gained experience. In statistics there are various ways of presenting data to ones advantage or disadvantage, it is a good analyst who sees through all that smoke and mirrors.
The stock market is reacting negatively to the inflation news but the writing was on the wall especially after last Weeks's Nigerian treasury bill auction and the bond market.