Many of us thinks the rise of inflation and the weakness of the naira currency is because of the new government we have in the country. Before now a state governor was complaining about how the past government was printing of money, and many people thought it was just propaganda which they took it very lightly. The hardships and the high inflation rate we are seeing today is as a result of printing money that has been taking place longtime ago.
The cause of the inflation is nothing but as a result of printing money that is naira is losing value constantly everyday. The economy has never been bad like this, we are facing the consequences of wrong economy doings.
The current inflation in Nigeria is more of 'supply driven' inflation than a 'demand driven' one. Policy rate adjustments as a tool becomes ineffective when an inflationary trend is dominantly supply driven. We tend to often argue that our inflation is caused by excess money supply in the system chasing too few goods.
The devaluation of the naira is a top driver of inflation as it leads to higher import costs that ripple through the economy and affect production costs and other supply chain dynamics. This has resulted in elevated costs for machinery, fertilizers, and other inputs for farmers, which can result in higher food prices.