The ‘Computer Village’ in the Ikeja district in Nigeria’s commercial capital Lagos, Nigeria. Reuters

Nigeria’s central bank raised its monetary policy rate by 200 basis points (bps) o 24.75 per cent from 22.75 per cent, governor Olayemi Cardoso said, as the bank continued a tightening to head off soaring inflation.

This followed its largest rate hike in around 17 years last month, when the bank raised the rate by 4 percentage points to try to get price pressures under control.

Inflation is above 30 per cent in annual terms, its highest in almost three decades, fanning a cost of living crisis that has left millions of people in Africa’s biggest economy and most populous nation struggling to meet their basic needs.

Cardoso told a press conference that Monetary Policy Committee (MPC) members were convinced they needed to continue with the tightening cycle to tame inflation but also saw price pressures moderating from May.

“Considerations of the committee at this meeting focused on the current inflationary pressures and the need to anchor inflation expectations as well as ensure sustained exchange rate stability,” he said.

The committee’s decision was just the second since Cardoso took office last September, as it did not hold a meeting under him until February.

Price pressures have been spurred by reforms implemented by President Bola Tinubu in his first year in charge, chiefly ending a costly fuel subsidy and devaluing the country’s naira currency twice.

Tinubu has defended those reforms as necessary to lift economic growth and attract investment, but they have prompted public anger and, in some cases, desperation.

David Omojomolo, Africa economist at Capital Economics said further tightening was expected in the next two MPC sittings before authorities ease off and keep rates steady.

“We expect Governor Cardoso’s desire to bring the inflation crisis to a close and also strengthen the naira will lead to more tightening,” said Omojomolo.

Nigeria’s sovereign international dollar bonds rose after the hike its highest level in almost two years, according to Tradeweb data.

Meanwhile, Nigeria raised its rate to 24.75 per cent, its second straight hike in an attempt to tame soaring inflation, boosting sovereign international dollar bonds. The 2029 note saw the biggest rise, up 1.4 cents as high as 97.91 cents on the dollar, its highest price in almost two years, according to Tradeweb data.

The bond was last trading at 97.565 cents on the dollar. “Governor Cardoso’s desire to bring inflation crisis to a close and also strengthen the naira will lead to more tightening. We have penciled in further 100-bps hikes in May and July each before the hiking cycle is brought to a close,” David Omojomolo, an Africa-focused economist with Capital Economics wrote. In Latin America, data showed Brazil’s consumer prices rose slightly more than expected in their mid-March reading but the 12-month print slowed to its lowest level since last year.

Nigeria’s oil regulator met with producers and local refiners to fix implementation of a policy mandating crude sales to domestic refineries, the head of the agency said on Tuesday.

Nigeria relies on imports for most of its fuel needs due to inadequate refining capacity, but a new 650,000-barrel-a-day plant by Africa’s richest man Aliko Dangote will make it self-sufficient and able to export abroad.

The Domestic Crude Oil Supply Obligation (DCSO), introduced under the petroleum industry law in 2021, aims to boost local refining capacity and reduce reliance on imported fuels.

However, Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) chief Gbenga Komolafe acknowledged difficulties with the policy which could threaten national oil production targets and hinder smooth implementation.

Key concerns include producers’ existing contracts that do not reflect the DCSO, delays in payment guarantee from refineries and logistical hurdles such as last-minute vessel changes.

“Our aim is to identify and address these challenges effectively, with the ultimate goal of ensuring a seamless and efficient allocation process by the oil producers and off-take by the domestic refiners,” Komolafe said on Tuesday.

“Our priority is to uphold the integrity of the DCSO framework while fostering a conducive environment for the sustainable growth of Nigeria’s oil and gas industry,” he added, highlighting the meeting’s objective to address concerns raised by oil producers and refiners, especially Dangote Refinery, the country’s largest privately owned plant.

While a committee with industry representatives is working on a framework for smoother DCSO implementation, Komolafe emphasized the need for direct talks with oil company chief executives “since the buck stops on your desk,” he said.