Nigeria’s inflation rate soars for 8th consecutive month to 25.80% in August

By Onome Amuge.

Nigeria’s inflation rate rose  for the eighth straight month in the year to 25.80 per cent in August 2023,representing an increase of 1.72  percentage points from 24.08 per cent recorded in July 2023.

This is according to the latest inflation report by the National Bureau of Statistics (NBS),which measured the rate of changes in prices of goods and services.

The report further noted  that on a year-on-year basis, the headline inflation rate was  5.27  percentage points higher compared to 20.52 per cent recorded in the corresponding period of August 2022.

The NBS disclosed that the contributions of items on the divisional level to the increase in the headline index include food & non-alcoholic beverages which rose 13.36 per cent; housing, water, electricity, gas & other fuel which increased 4.32 per cent; clothing & footwear which were up 1.97 per cent; transport which increased 1.68 per cent; 1.30 per cent increase in the cost of furnishings, household equipment & maintenance;while  the education index surged to 1.02 per cent.

There was also percentage  increases in other components of the the divisional level  as health rose to  0.78 per cent; miscellaneous goods & services  rose to 0.43 per cent rate from the previous month; while  restaurant & hotels; alcoholic beverage, tobacco & kola ; recreation & culture ,recorded month-on-month increases of 0.31 per cent,0.28 per cent, 0.18 per cent, respectively.Also, the communication divisional level rose to 0.18 per cent.

Meanwhile, on a month-on-month basis, the headline inflation rate in August 2023 was 3.18 per cent, which was 0.29 per cent higher than the 2.89 per cent recorded in July 2023. This, according to the NBS, means that in the month of  June 2023, on the average, the general price level was 0.29 per cent higher relative to July 2023.

The percentage change in the average CPI for the twelve months period ending August 2023 over the average of the CPI for the previous twelve months period was 22.38 per cent, indicating  5.31 per cent increase compared to 17.07 per cent recorded in August 2022.

The food inflation rate in August 2023 also surged to 29.34 per cent on a year-on-year basis; which was 6.22 per cent points higher compared to 23.12 per cent recorded in August 2022 . The rise in the food inflation on a year-on-year basis was attributed to increases in prices of oil and fat, yam and other tubers, bread and cereals, fish, potatoes, fruits,cheese, meat, vegetable, and eggs.

On a month-on-month basis, the food inflation rate in August 2023 stood at 3.87  per cent, 0.41 per cent higher from 3.45 per cent recorded in July 2023.

The NBS report indicated that the rise in food inflation on a month-on-month basis was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, fish, oil and fat, coffee, tea, and cocoa.

The average annual rate of food inflation for the twelve-months ending August 2023 over the previous twelve month average rose to 25.01 per cent, which was a 5.99  percentage points increase from the average annual rate of 19.02 recorded in August 2022.

Meanwhile, the “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 21.15 per cent in August 2023 on a year-on-year basis; up by 4.03 points when compared to the 17.12  per cent recorded in August 2022. The highest increases were recorded in prices of gas, passenger transport by air, liquid fuel, vehicles spare parts, repair of transport equipment, medical services, passenger transport by road etc.

On a month-on-month basis, the core inflation rate stood at 2.18 per cent in August 2023, up by 0.07 per cent from 2.11 per cent in July 2023. The average twelve months annual inflation rate was 19.18 per cent for the twelve months ending August 2023; which was 4.38 percentage points higher than the 14.80 per cent recorded in August 2022.

The urban inflation rate in August 2023 jumped to 27.69 per cent, 6.73 percentage points higher year-on-year, compared to the 20.95 per cent recorded in August 2022. On a month-on-month basis, the urban inflation rate stood at 3.29 per cent, 0.24 percentage points higher  compared to 3.05 per cent recorded in July 2023. The corresponding twelve-months average for the urban inflation rate was 23.46 per cent in August 2023,5.87  percentage points higher against 17.59 per cent recorded in August 2022.

In a similar trajectory, the rural inflation rate was higher in August 2023 at 24.10 per cent, rising 3.98 percentage points on a year-on-year basis,compared to 20.12 per cent recorded in August 2022.

On a month-on-month basis, the rural inflation rate  was 3.08 per cent, up  by 0.34 per cent compared to 2.74 per cent in July 2023.

The NBS also noted that the corresponding twelve-months average for the rural inflation rate in August 2023 was 21.39 per cent. This was 4.81 per cent higher than 16.58 per cent recorded in August 2022.