The National Bureau of Statistics released the inflation report for the month of August 2023, with headline inflation sustaining its upward trajectory to 25.80% in August 2023, compared to 24.08% registered in July 2023.
According to analysts at Arthur Stevens Asset Management Limited, “this uptick marked the eighth consecutive increase in headline inflation in 2023.
“Analysis of the report show that headline inflation was 1.72% higher than the rate printed in July 2023 (24.08%) and 5.27% higher than the rate printed in August (20.52%). As expected, both food and core inflation catch the wave, accelerated to 29.34% and 21.15%, respectively.”
So far, the analysts noted, inflation in Nigeria has defied efforts by the monetary authority to keep it in check, recalling that the apex bank has adopted several measures to cushion the continued rise in inflation ranging from raising the benchmark interest rate to redesigning of the currency, yet inflation defied every measure.
“We maintain that the key drag to inflation remain largely on the supply side. Illiquidity of FX for imports, continued naira depreciation, removal of fuel subsidy, rain deficits and insecurity in the food producing region.”
Given that the monetary policy committee has increased the benchmark interest rate to a record high of 18.75%, yet inflation remain elevated, the analysts foresee “scope for hawkish stance in the next monetary policy meeting. We see scope for 50bpts.”

Outlook/Recommendation
Consequently, it continued, “given the gap between the benchmark interest rate and other market rates on securities, we expect investors to tilt toward the equities market considering its positive responsiveness to newly made policies. In line with this, the NGX All-Share Index has returned 31.5% YtD so far in 2023 as of the time of this writing. Thus, making the Nigeria equities market one of the best performing markets so far.
“Overall, we recommend a strong play in the equities market where investors can earn real returns. Investors are to tilt towards stocks with strong fundamental justification.”