Nigeria’s inflation accelerates to 14.23 per cent
The latest data shows the headline inflation rate has risen by 321 bps since August 2019, while the food inflation rate has risen by 421 bps in the same period.
Nigeria’s Consumer Price Index (CPI) rose to 14.23 per cent year-on-year in October 2020, representing 52 basis points (bps) (or 0.52 percentage point) increase, compared to 13.71 per cent reported in September 2020. This is according to the latest monthly inflation report released today by the National Bureau of Statistics (NBS).
On a month-on-month basis, the CPI – which measures inflation – rose by 1.54 per cent in October, or 0.06 percentage point higher than the rate recorded in the previous month (1.48 per cent). This was the highest monthly increase in the headline index in 40 months, since the 1.58 per cent recorded in June 2017.
The latest inflation figure shows the CPI has been rising for fourteenth consecutive months. It is also the highest inflation rate recorded since February 2018 when the CPI stood at 14.33 per cent. The NBS said there were increases in all major indices that yielded the latest data for the main inflation index.
Food inflation – which accounts for more than half the inflation basket – rose by 72 bps to 17.38 per cent last month compared to 16.66 per cent reported in September 2020, according to the statistics agency. NBS data shows the food inflation in October was the highest recorded in 32 months.
The statistics agency said the rise in the food inflation was caused by increases in prices of bread and cereals; potatoes, yam and other tubers; oils and fats; fish and meat; alcoholic and food beverages; and vegetable and fruits. On a month-on-month basis, the food sub-index increased by 1.96 per cent in October, up by 8 bps when compared to 1.88 per cent recorded in the preceding month.
Based on state profiles, food inflation was highest in Edo (21.65 per cent), Zamfara (20.88 per cent) and Kogi (20.58 per cent), while Lagos (14.57 per cent), Ogun (14.47 per cent) and Ondo (14.23 per cent) recorded the slowest rise.
Core inflation, which excludes the prices of volatile agricultural produce, stood at 11.14 per cent in October, up by 0.56 percentage point when compared to the preceding review period. The NBS said the highest increases were recorded in prices of passenger transport by air, pharmaceutical products, hospital and medical services, paramedical services, maintenance and repair of personal transport equipment.
Price increases were also recorded in vehicle spare parts, motor cars, hairdressing salons and personal grooming establishments, shoes and other footwear, and miscellaneous services relating to the dwelling.
The latest data shows the headline inflation rate has risen by 321 bps since August 2019, while the food inflation rate has risen by 421 bps in the same period. Nigeria's inflationary pressures in the last fourteen months have included rising food prices due to the country’s land border closures and COVID-19 restrictions, as well increase in transportation costs due to higher petrol prices since the government removed petrol subsidy. Added to these pressures in October were the effects of the #EndSARS protests and the subsequent riots, which led to government-imposed curfews in several states, including Edo and Lagos.
Nigeria's annual inflation rate as measured by Professor of Applied Economist at the Johns Hopkins University in the United States, Steve Hanke, is currently at 32.10 per cent. This rate is more than double the official annual inflation rate for October as reported by the NBS. Hanke's latest figure, which he reported over the weekend, is higher than the 29.53 per cent he reported last month.
The economist said his annual inflation rates are measured based on a purchasing power parity (PPP) model, which he said represents the “gold standard” for measuring inflation for countries experiencing elevated inflation rates and/or hyperinflation. The PPP-determined inflation rate model uses black market exchange rate data and high‐frequency (daily) data available on the last day of the month.
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