Nov. 16 (Bloomberg) -- A removal of Nigeria’s fuel subsidy may raise the West African country’s inflation rate to 12 percent to 13 percent if it is done in stages, London-based CSL Stockbrokers Ltd. said in an e-mailed statement today.
Nigeria, Africa’s biggest oil producer, imports most of its fuel products because of a lack of refining capacity. Deregulating the fuel subsidy would save the government 1.2 trillion naira in 2012 ($7.6 billion) as it plans to increase spending by 7 percent next year, according to the Budget Office.
The country’s inflation rate rose for a second month to 10.5 percent in October, staying above the central bank’s 10 percent target, after the naira weakened.
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