By Joshua Elekwachi, Abuja
Inflation rate in Nigeria hits 31-month high in September 2020 over persisted increase in prices of food stuff.
Nigerian NewsDirect gathered that inflation rate was 13.34 per cent in March 2018.
However, the National Bureau of Statistics (NBS) on Thursday said prices of food items increased inflation rate to 13.71per cent in September.
This is 0.49 per cent points higher than 13.22 per cent recorded in August.
According to the bureau, “The consumer price index, (CPI) which measures inflation increased by 13.71 percent (year-on-year) in September 2020.”
The report stated that the percentage change in the average composite CPI for the 12 months period ending September 2020 over the average of the CPI for the previous 12 months period was 12.44 per cent, showing 0.21 per cent point from 12.23 per cent recorded in August 2020.
The report by NBS said, “On a month-on-month basis, the urban index rose by 1.56 per cent in September 2020, up by 0.14 from 1.42 per cent recorded in August 2020, while the rural index also rose by 1.40 per cent in September 2020, up by 0.13 from the rate recorded in August 2020 (1.27 per cent).
“The urban inflation rate increased by 14.31 per cent (year-on-year) in September 2020 from 13.83 per cent recorded in August 2020, while the rural inflation rate increased by 13.14 per cent in September 2020 from 12.65 percent in August 2020.
“The corresponding twelve-month year-on-year average percentage change for the urban index is 13.07 per cent in September 2020.
“This is higher than 12.85 per cent reported in August 2020, while the corresponding rural inflation rate in September 2020 is 11.86 per cent compared to 11.66 per cent recorded in August 2020.”
The report stated that the composite food index rose by 16.66 per cent in September 2020 compared to 16.00 per cent in August 2020.
“This rise in the food index was caused by increases in prices of Bread and Cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits and Oils and fats.
“On month-on-month basis, the food sub-index increased by 1.88 per cent in September 2020, up by 0.21 per cent points from 1.67 per cent recorded in August 2020.
“The average annual rate of change of the Food sub-index for the 12-month period ending September 2020 over the previous 12-month average was 15.13 per cent, 0.26 per cent points from the average annual rate of change recorded in August 2020 (14.87 per cent),” the report added.
Speaking on how to reduce inflation rate, economist and financial analyst, Eze Igweoffia, said there is need to identify the causes of inflation rate in Nigeria.
He highlighted that “The exchange rate volatility and the Naira loss of value means all imported items have skyrocketed in price. There is low local food production due to insecurity. Most farmlands have become conflict zones between Farmers and Herders.
“There is no lending to the real sector, so the real sector is starved of funds. There is rising unemployment which means productivity generally is low. That means demand have far exceeded the supply of certain goods and services
“There’s also political tension in the country that’s almost akin to a war time and this is frustrating businesses.”
On how to reduce inflation rate, he said, “There’s need for guaranteed security of lives and properties especially in the productive hubs of this Country. Both Agricultural and Industrial hubs.
“The CBN must ensure the banks implement the new interest rate to increase lending to the real sector
“The Government need to define its policy direction to build confidence in investors
“The Government should strive to achieve a single exchange window and allow the Naira to determine its value through demand and supply. We need to open up the economy to inflows both in FDI and remittances.”
However, analysts at Cordros Research said, “For October, we expect the pressure on consumer prices to be maintained, and look for m/m headline inflation reading of 1.51 per cent in October, with the low base effect from 2019 translating to 50basis points expansion in y/y headline inflation to 14.21per cent.”