Nigeria’s inflation rate hits 27.33% as food insecurity deepens
…Food, housing drive headline index increase — NBS
…Food inflation rate skyrockets to 31.52% in October
Nigeria’s inflation rate continues to soar, reaching a new high of 27.33 percent in October, up from 26.72 percent in September, according to the National Bureau of Statistics.
This marks a 0.61 percent increase in the headline inflation rate, which is the highest it has been in over a decade. The year-on-year increase is even more significant, with the current rate being 6.24 percent higher than in October 2022.
This rise in inflation is largely attributed to the country’s ongoing economic challenges, including a weakened currency, rising food prices, and a shortage of foreign exchange.
Nigeria’s inflation quickened to a new 18-year high in October as higher input costs and a weaker naira sent food and goods prices soaring, adding pressure on the central bank to raise interest rates.
The latest figure marks the tenth consecutive rise in the country’s inflation rate this year.
“This shows that the headline inflation rate (year-on-year basis) increased in October 2023 when compared to the same month in the preceding year (i.e., October 2022),” it said.
In the realm of rising food prices, Nigeria finds itself caught in a whirlwind of inflation.
The latest report reveals that the food inflation rate in October surged to a staggering 31.52 percent compared to the previous year, a significant leap of 7.80 percent points.
This alarming trend has been exacerbated by various government policies, including the removal of subsidies on petrol. President Bola Tinubu, in his inaugural address on May 29th, made the fateful announcement of subsidy removal on petrol.
Unfortunately, this decision has unleashed a wave of hardship upon the Nigerian population, leading to a surge in the prices of essential goods and services. Adding to the nation’s woes, the value of the naira has plummeted by more than 50 percent in both authorised and unauthorized markets.
This depreciation was triggered by the Central Bank of Nigeria’s decision to consolidate all forex windows into the Investors and exporters (I&E) window in June. Inflation continues to plague Africa’s largest economy, prompting the central bank to raise interest rates to levels not seen in nearly two decades.
In a bold move, the Central Bank of Nigeria hiked its benchmark lending rate to a staggering 18.75 percent in July.
The bank said, “Hiking the interest rate has made a lot of difference in moderating the rate of inflation.”
It noted that the option to continue the hike in the policy rate, albeit moderately, also presented a strong alternative premised on the expected liquidity injections into the economy from the recent efforts to unify the nation’s foreign exchange markets.
In July, Tinubu declared an immediate State of Emergency on food insecurity to tackle the increase in food prices.
He also directed that “all matters pertaining to food & water availability and affordability, as essential livelihood items, be included within the purview of the National Security Council.”
…Food, housing drive headline index increase — NBS
In its inflation report Wednesday, the NBS said the contributions of items on the divisional level to the increase in the headline index are food & non-alcoholic beverages (14.16 percent), housing water, electricity, gas & other fuel (4.57 percent), clothing & footwear (2.09 percent), and transport (1.78 percent).
Others are furnishings & household equipment & maintenance (1.37 per cent), education (1.08 percent), health (0.82 percent), miscellaneous goods & services (0.45 percent), restaurant & hotels (0.33 percent), alcoholic beverage, tobacco & kola (0.30 percent), recreation & culture (0.19 percent) and communication (0.19 percent).
The report said on a month-on-month basis, the headline inflation rate in October 2023 was 1.73 percent, which was 0.37 percent lower than the rate recorded in September 2023 (2.10 percent).
“This means that in October 2023, the rate of increase in the average price level is less than the rate of increase in the average price level in September 2023.
“The percentage change in the average CPI for the twelve months ending October 2023 over the average of the CPI for the previous twelve-month period was 23.44 percent, showing a 5.57 percent increase compared to 17.86 percent recorded in October 2022,” the report said.
…Food inflation rate skyrockets to 31.52% in October
The food inflation rate in October 2023 was 31.52 percent on a year-on-year basis, which was 7.80 percent points higher compared to the rate recorded in October 2022 (23.72 per cent).
The bureau said the rise in food inflation on a year-on-year basis was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables and milk, cheese and eggs.
“On a month-on-month basis, the Food inflation rate in October 2023 was 1.91 percent this was 0.54 percent lower compared to the rate recorded in September 2023 (2.45 per cent),” it said.
The National Bureau of Statistics has reported a decrease in food inflation in Nigeria for the month of October 2023.
The decline was attributed to a slower rate of increase in the average prices of fruits, oil and fat, coffee, tea and cocoa, bread and cereals. However, the average annual rate of food inflation for the twelve months ending October 2023 was 26.33 percent, which was a 6.50 percent increase from the previous year’s average annual rate of change recorded in October 2022 (19.83 percent).
