Kwara emerges Nigeria state with slowest pace of inflation

Thinking of settling down and raising a family? Kwara may well be your destination as it has emerged the state with slowest pace of inflation in Nigeria, according to inflation data recently released by the Nigeria statistical agency, the National Bureau of Statistics (NBS).

The NBS data indicated that Kwara State’s inflation rate declined further to 8.87 percent, maintaining its position as the state with the lowest inflation rate, followed by Kogi (9.07 percent) and Delta (9.22 percent). On the flip side, the states with the highest inflation rates are Kebbi (14.65%), Yobe (13.68%) and Jigawa (13.62%).

Nigeria’s headline inflation dipped for the 16th consecutive month to 11.61 percent in the month of May from 12.48 percent in April, in line with analysts’ expectations and general consensus. Also noteworthy is the fact that core and food inflation as well as urban and rural inflation declined.

Cumulatively, inflation rate has declined by 3.52 percent, supported mainly by the base year effects.

However, a troubling trend from the inflation data is the increase in month-on-month inflation (a better reflection of current prices and inflation expectations) to 1.09%, which is annualized at 13.97 percent. This was primarily due to the spike in food prices, driven by a confluence of factors- Ramadan fast, planting season shortages and increased logistics cost (diesel prices- N205.67/litre).

Despite this, the food sub-index (year-on-year) slowed to 13.45 percent from 14.80 percent in April. However, month-on-month food index recorded an increase of 42bps to 1.33 percent in May. This is largely attributed to higher food prices as a result of the confluence of the Ramadan fast and the planting season.

The core sub-index (inflation less seasonalities) declined marginally to 10.7 percent from 10.9 percent in April. On the other hand, month-on-month core inflation increased by 11bps to 0.98 percent in May from 0.87 percent in the previous month owing to increased cost of logistics. The average price of diesel increased 4.91 percent to N205.67/litre in May.

Imported inflation eased by 15bps to 15.3 percent from 15.45 percent in April. This was partly supported by a relatively stable exchange rate.

Rural and urban inflation rate (year-on-year) declined to 11.2 percent and 12.08 percent, from 12.13 percent and 12.89 percent in April. Month- on-month, both rural and urban indices increased sharply to 1.08 percent and 1.10 percent from 0.82 percent and 0.85 percent respectively in April.