By Kayode Tokede with News Agency
The National Bureau of Statistics (NBS) on Monday said consumer price index, which measures inflation, hit 14.23 per cent in October.
The nation’s inflation rate rose to 13.71 per cent in September from 13.22 percent a month earlier, according to the NBS.
The inflation rate jumped by 0.52 percentage points which is the highest recorded since July 2016 when the inflation rate increased by 0.65 percentage points.
Inflation measures the rate at which the prices of goods and services increase over a period of time.
The October CPI/Inflation report released on Monday showed that food inflation hit 17.38 percent from 16.66 percent in September.
This bureau said the rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, vegetable, alcoholic and food beverages and oils and fats.
According to NBS, “The urban inflation rate increased by 14.81 per cent (year-on-year) in October 2020 from 14.31 per cent recorded in September 2020, while the rural inflation rate increased by 13.68 per cent in October 2020 from 13.14 per cent in September 2020.
“On a month-on-month basis, the urban index rose by 1.60 per cent in October 2020, up by 0.04 from 1.56 per cent recorded in September 2020, while the rural index also rose by 1.48 per cent in October 2020, up by 0.08 from the rate recorded in September 2020 (1.40 per cent).”
However, the Lagos Chamber of Commerce and Industry (LCCI) has urged the Central Bank of Nigeria (CBN) to address the supply side variables impacting domestic prices.
Director-General, LCCI, Dr Muda Yusuf spoke in an interview with the News Agency of Nigeria (NAN) in reaction to the October 2020 inflation rate.
Yusuf listed the variables impacting domestic prices to include transportation costs, logistics challenges and exchange rate depreciation.
Others, he said, are forex liquidity issues, Value Added Tax increase, climate change, insecurity in farming communities and structural bottlenecks to production.
According to the Director- General, any mitigation measures will have to be situated in the context of these variables.
Yusuf said that the potency of monetary policy instruments in tackling inflation was weak.
He projected that inflation was unlikely to abate till after the festivities due to demand side issues.
“To every inflation situation, there are demand and supply side issues, and from what I’m seeing, due to the large demand expected during the Yuletide, it is unlikely to abate.
“There are many variables impacting domestic prices as stated above, and any mitigation measures would have to be situated in the context of these variables.
“Even the CBN had admitted that the potency of monetary policy instruments in tackling inflation is weak.
“The CBN has in recent months focused on boosting growth to improve output and moderate inflation.
“With the imminent recession, this is perhaps an appropriate policy choice.
“For an economy seeking to quickly recover and create jobs, monetary policy tightening is not an option,” he said.
In bid to tackle the rising inflation in the country, the federal government has said it may consider reducing import duties on mass transit buses.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed stated this over the weekend at a virtual consultation and stakeholder engagement to discuss the economic and fiscal policy drivers underpinning the Finance Bill 2020.
The Minister who said the inflation rate in Nigeria is largely driven by the cost of transport noted that the draft bill sought to reduce transportation cost in the country.
The country has seen an increase in transport costs in recent months largely on the back of the hikes in the pump price of petrol, used by many commercial transporters to power their vehicles.
In what is the latest in a series of petrol price hikes since July, fuel marketers have raised the pump price of the product on Friday following the increase in the ex-depot price.
The average transport fare paid by commuters for bus journeys within a city increased by 12.70 per cent month-on-month and 48.02 per cent year-on-year to N278.88 in August, the latest data from the National Bureau of Statistics showed.
Ahmed said, “The bill contain some interesting new proposals, fiscal relief for mass transit which is designed to provide support to mass transit by reviewing the duties regime.
“The essence why this is being done is we recognise transportation as one of the major cost drivers in the economy. If you look at the rate at which our inflation is going, and you disaggregate the components, you will find that inflation is largely driven by transport cost.
“So, the essence here is to reduce transportation cost so that businesses will have ease and pass benefits to eventual consumers.”