The World Bank said CBN’s financing of the fiscal deficit continues to fuel inflation by increasing liquidity in the money market.
The international financial organisation made this known in the latest edition of its Nigeria development update titled, ‘Nigeria’s choice’.
Last November, the IMF warned that the CBN’s continued financing of the country’s deficit through ways and means will complicate the effort to contain inflation. In its latest report, the World Bank said interest payments on such advances will increase by 2.4 percentage points of the gross domestic products between 2018 and 2027.
But higher inflation in 2022 is estimated to have pushed an additional five million Nigerians into poverty between January and September 2022, mainly through higher prices of local staples, such as rice, bread, yam, and wheat, especially in non-rural areas.
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