By Onome Amuge.
The Centre for the Promotion of Private Enterprise (CPPE) has warned that the Nigerian government must address the country’s electricity, foreign exchange, and transportation issues to curb inflation, which has been on the rise for nine months.
Muda Yusuf, the director of CPPE, said the rising inflation rate in Nigeria is alarming and must be addressed to prevent further economic hardship for the country’s citizens. He cited the country’s lack of a stable power supply, volatile foreign exchange rates, and inefficient transportation infrastructure as major contributing factors to the current economic challenges.
The director of the economic think-tank group warned that Nigeria’s rising inflation is having a negative impact on the purchasing power of its citizens, exacerbating the problem of poverty in the country. He cited several factors contributing to this problem, including the depreciating exchange rate, high transportation costs, and the rising cost of diesel. In addition, he pointed to challenges with the country’s foreign exchange market, logistical issues, and climate change as contributing factors. He emphasized that fixing these problems, particularly those in the power, foreign exchange, and transportation sectors, is essential for controlling inflation.
CPPE emphasized the need for an emergency response to the energy and power sectors to tackle rising inflation. It noted that it will be difficult to control inflation without addressing the problems in these areas. While there are no quick fixes, the group stressed the importance of prioritizing these issues and developing effective strategies to address them.
According to a recent report from the National Bureau of Statistics (NBS), Nigeria’s inflation rate increased to 26.72 per cent in September 2023, marking the ninth consecutive month of rising inflation. This represents a 0.92 per cent increase from the previous month’s inflation rate of 25.80 per cent. The NBS report attributed the increase to rising food and non-food costs, as well as a weaker exchange rate.
On a year-over-year basis, the inflation rate in September 2023 was 5.94 percentage points higher than the inflation rate in September 2022. The inflation rate on a month-over-month basis in September 2023 was 2.10 per cent, which was 1.08 per cent lower than the rate in August 2023. This indicates that the rate of price increase in September 2023 was lower than the rate in August 2023. Overall, the NBS report shows that inflation continues to rise in Nigeria, although the month-over-month rate has shown a slight decrease.
The NBS report indicates that in September 2023, the headline inflation rate was 26.72 per cent, which is a 0.92 per cent increase from the August 2023 rate. On a year-on-year basis, the inflation rate was 5.94 per cent higher than the rate recorded in September 2022. This suggests that inflation has increased in Nigeria both month-on-month and year-on-year. The report emphasizes the need for continued focus on reducing inflation and improving economic stability.
The NBS report shows that the month-on-month inflation rate in September 2023 was 2.10 per cent, which is 1.08 per cent lower than the August 2023 inflation rate of 3.18 per cent. This indicates that the rate of increase in prices in September 2023 was lower than in August 2023. Additionally, the report states that the inflation rate for the twelve months ending September 2023 was 22.90 per cent, representing a 5.47 per cent increase from the previous year.
The NBS report highlights that the increase in the headline index was driven by the following divisions: food and non-alcoholic beverages (13.84%), housing, water, electricity, gas, and other fuels (4.47%), clothing and footwear (2.04%), transport (1.74%), furnishings, household equipment and maintenance (1.34%), education (1.05%), health (0.80%), miscellaneous goods and services (0.44%), and restaurant and hotels (0.32%). Meanwhile, the recreation and culture and communication divisions were unchanged at 0.18 per cent.
The food inflation rate in September 2023 was 30.64 per cent on a year-on-year basis, up 7.30 per cent from September 2022. The main drivers of this increase were higher prices of oil and fat, bread and cereals, potatoes and yams, fish, fruit, meat, vegetables, and milk, cheese, and eggs. On a month-on-month basis, the food inflation rate was 2.45 per cent, which was 1.41 per cent lower than August 2023.
On a year-on-year basis, the urban inflation rate for September 2023 was 28.68 per cent, an increase of 7.43 per cent from the previous year. On a month-on-month basis, the urban inflation rate was 2.24 per cent, down 1.05 per cent from August 2023. The average urban inflation rate over the past twelve months was 24.10 per cent, which was 6.16 per cent higher than the average rate in September 2022.
The rural inflation rate in September 2023 was 24.94 per cent on a year-on-year basis, up 4.62 per cent from September 2022. On a month-on-month basis, the rural inflation rate was 1.96 per cent in September 2023, which was 1.12 per cent lower than August 2023. The rural inflation rate’s twelve-month average in September 2023 was 21.79 per cent, which was 4.85 per cent higher than the same period last year.
The “All items less farm produces and energy” or core inflation rate, which excludes the prices of volatile agricultural products and energy, was 21.84 per cent in September 2023 on a year-on-year basis, 4.35 per cent higher than September 2022. The highest price increases were recorded in passenger transport by road, passenger transport by air, medical services, repair of furniture, maintenance and repair of personal transport equipment, etc. On a month-on-month basis, the core inflation rate was 2.22 per cent in September 2023, 0.05 per cent higher than in August 2023.
