The CBN has struggled to control inflation over the past two years, owing to elevated global food and fuel prices, political uncertainty and the high level of both government spending and liquidity in the economy. Although some of these factors will decline in significance during the forecast period, inflation will not come down especially quickly. Food prices are on the increase once again, and although government expenditure will slow, it will remain robust-especially at state level, where fiscal laxity remains a problem. The CBN recognises the challenges faced, having increased its prime interest rate in the second half of 2010 and early 2011, and is expected to tighten monetary policy further in 2011. However, the strength of tightening required for a major drop in inflation will be politically unpopular with a government that will continue to favour keeping interest rates relatively low, in order to boost lending to the non-oil sectors of the economy. From an estimated peak of 13.7% in 2010, inflation is forecast to moderate to an average of 9.1% in 2015.