Nigeria's inflation declined by 8.33 per cent in February to 11.1 per cent from 12.1 per cent in January according to a statement from the National Bureau of Statistics (NBS) on Tuesday in Abuja.

It was an improvement on the 11.8 per cent in December 2010 from 13.6 per cent in September, but still far from the single digit target of the Central Bank of Nigeria (CBN).

Its Monetary Policy Committee (MPC) meeting on the 24th and 25th January, 2011 noted that “although inflation has been trending downwards, the single digit benchmark was not achieved in 2010, despite the relatively good harvest, improved supply of petroleum products and lower growth in monetary aggregates.

“This underscores the need to address both supply and demand side factors that determine inflation dynamics in Nigeria.”

It therefore raised the Monetary Policy Rate (benchmark interest rate) by 25 basis points from 6.25 per cent to 6.50 per cent.

CBN Governor Lamido Sanusi recently indicated that the MPR may be raised again this year in view of increasing spending by politicians ahead of April elections, capital injection for the recapitalisation of the rescued banks and high cost of food and oil.