Against Expectations, Nigeria’s Inflation Jump To 21.82%, 17-yr Peak

The annual inflation rate in Nigeria rose to 21.82 percent in January 2023 from 21.34 percent in December 2022, the highest since September 2005, beating the expectation of a slowdown to 21.3 percent.

Soaring food prices of Bread and Cereal (21.67%), Actual and Imputed Rent (7.74%), Potatoes, Yam and Tuber (6.06%), Vegetable (5.44%), and Meat (4.78%)and a weaker Naira currency which has crashed to over N700 to a dollar were the main drivers. Prices of food which are the most relevant in the CPI basket recorded an upturn to 24.32 percent in January from 23.75 percent in December.

On a monthly basis, consumer prices surged by 1.87 percent, the most in almost 16 years, after a 1.71 percent increase in the previous month. This means that in the month of January 2023, on average, the general price level was 0.15% higher relative to December 2022. The percentage change in the average CPI for the twelve months period ending January 2023 over the average of the CPI for the previous twelve months period was 19.36%, showing a 2.49% increase compared to 16.87% recorded in January 2022. The increases were recorded in all COICOP divisions that yielded the headline index

Looking at the trend, the January 2023 inflation rate showed an increase of 0.47 percent points when compared to December 2022 inflation rate. However, on a year-on-year basis, the headline inflation rate was 6.22 percent points higher compared to the rate recorded in January 2022, which was 15.60 percent. This shows that the headline inflation rate (year-on-year basis) increased in the month of January 2023 when compared to the same month in the preceding year (i.e., January 2022).

On a yearly basis, in January 2023, the urban inflation rate was 22.55 percent, and 6.38 percent points higher compared to the 16.17 percent of January 2022. On a month-on-month basis, the urban inflation rate was 1.98 percent in January 2023, indicating 0.17 percent points higher than in December 2022 (1.80%).

The corresponding twelve-month average for the urban inflation rate was 19.91 percent in January 2023. This was 2.48 percent points higher compared to the 17.44 percent reported in January 2022.

The rural inflation rate in January 2023 was 21.13 percent on a year-on-year basis; this was 6.08 percent points higher compared to the 15.06 percent recorded in January 2022. On monthly basis, the rural inflation rate in January 2023 was 1.77 percent up by 0.14 percent points compared to December 2022 (1.63%). The corresponding twelve-month average for the rural inflation rate in January 2023 was 18.84 percent. This was 2.53 percent points higher compared to the 16.31 percent recorded in January 2022.