Pressures from bread, cereals, potatoes, yam, meat, fish, fruits, oils, fats prices push Nigeria’s inflation to 2 year high

Charles Abuede

• Food, core inflation indexes rise by 16.66 and 10.58 per cents
• Lowest records in all items inflation found in Lagos, Abuja and Kwara

Nigeria’s headline inflation rose by 1.48 per cent in September 2020 to hit 13.71 per cent from 13.22 per cent recorded in August and indicating 49 basis points increase from the previous rate. This is the highest rate recorded since March 2018, recent data from the National Bureau of Statistics revealed on Thursday.

A cursory analysis of the data shows that on a month-on-month basis, the headline inflation index increased by 1.48 per cent in September 2020. This is 0.14 per cent rate higher than the rate recorded in August 2020 (1.34) per cent as increases were recorded in all classification of individual consumption by purpose (COICOP) divisions that yielded the headline index.

The faster speed of increase in the index suggests that inflation, which is the average change over time in prices of goods and services consumed by people for day-to-day living, has become difficult and is in doubt to reach an inflexion point in the near term. This is particularly so based on the fact that the inflationary pressure is coming more from the food component which increased by as much as 16.66 per cent during the period under review.

According to the report from the Abuja based statistics bureau, the composite food index rose by 16.66 per cent in September 2020 compared to 16.00 per cent in August 2020. However, this rise in the food index was as a result of increases in the prices of bread and cereals, potatoes, yam, meat, fish, fruits and oils and fats.

Meanwhile, during the month under review, food inflation was highest in Zamfara (20.94%), Kogi (19.06%) and Plateau/Yobe (18.90%) states on a yearly comparison, while Nasarawa (13.94%), Lagos (13.87%) and Ondo (13.59%) states recorded the slowest rises.

Furthermore, the food sub-index increased by 1.88 per cent in September 2020, and up by 0.21 per cent points from 1.67 per cent recorded in the previous month.

In a similar development, the core inflation, which leaves out the prices of volatile agricultural produce stood at 10.58 per cent in September 2020, and rising by 0.06 per cent when compared with 10.52 per cent documented in August 2020. Though, the highest increases were recorded in prices of air ticket, medical services, hospital services, pharmaceutical products, road transport fares, motor cars, vehicle spare parts, maintenance and repair of personal transport equipment, repair of furniture and paramedical services.

While the all-items inflation was highest in Bauchi (17.85%), Zamfara (17.42%) and Kogi (16.66%) states, with Lagos (11.19%), Abuja (10.59%) and Kwara (10.53%) states recording the slowest rise in headline inflation on year on year basis.