Inflation In Nigeria - SS2 Economics Lesson Note

Inflation in Nigeria is the persistent rise in the general price level of goods and services over time. Nigeria has experienced inflation for several decades, with the rate increasing and decreasing over time.

The major cause of inflation in Nigeria is the excessive printing of money by the government. When more money is printed than the goods and services available in the economy, demand for goods and services exceeds supply, leading to an increase in prices. Other factors contributing to inflation in Nigeria include poor infrastructure, high cost of production, and insecurity.

In Nigeria, inflation has significant effects on the economy, such as reducing the purchasing power of money and lowering the standard of living. High inflation also discourages investments, leading to a slowdown in economic growth. Additionally, inflation can lead to social unrest, as people become dissatisfied with the high cost of living.

To combat inflation, the Central Bank of Nigeria (CBN) implements policies such as increasing interest rates, reducing the money supply, and encouraging investment in the production sector. The CBN also works with the government to address structural issues such as infrastructure development and the diversification of the economy away from oil dependence.