According to the National Bureau of Statistics’ (NBS) May Consumer Price Index (CPI) data, Nigeria is 2.59 percentage points behind the World Bank prediction.

According to the June 2023 issue of the Nigeria Development Update, the bank predicted a considerable increase in 2023 to 25% as a result of the withdrawal of gasoline subsidies.

President Bola Tinubu declared in May that the fuel subsidy would be phased off beginning in June, causing petrol prices to rise across the country.

In lieu of this, the World Bank said: “The removal of the petrol subsidy is anticipated to cause a temporary increase in inflation in the upcoming months before contributing to disinflation in the medium term.

“Also, headline inflation is expected to rise from 18.8 percent in 2022 to 25 percent in 2023. However, by Q1 of 2024, the subsidy removal will start to have a disinflationary effect, meaning that it will alleviate inflationary pressures despite higher petrol prices.”

Despite the Central Bank of Nigeria’s many attempts to curb growing inflation, including boosting the monetary policy rate by 700 basis points, the country’s consumer price inflation has skyrocketed and is now one of the highest in the world.

“The loss of purchasing power from high inflation has increased poverty in the short-term, pushing an estimated 4 million Nigerians into poverty between January and May 2023.”

However, the Bank emphasised that eliminating the fuel subsidy would lessen the government’s long-term reliance on Central Bank of Nigeria (CBN) funding.