Nigeria’s Inflation Rises 11.61,% October
UMORU ABDULKADIR
The Nigeria’s Consumer Price Index (CPI) rose to 11.61 per cent in October 2019, recording a second consecutive rise since the closure of the country’s land borders three months ago.
Nigeria government closed its land borders August 20, 2019 to curb inflow of contraband goods.
This National Bureau of Statistics (NBS) in latest inflation report released Monday noted the CPI rose by 0.37 per cent points, higher than the 11.24 per cent reported in September and 11.02 per cent for August 2019.
The headline inflation had been on a steady decline for three consecutive months between June and August when the inflation figure reached 11.02 per cent, before edging up to 11.24 per cent in September. Before September’s surge in inflation rate, it had maintained a steady decline for 15 consecutive months
On a month-on-month basis, the headline inflation increased by 1.07 per cent in October 2019, or 0.03 percentage points higher than the rate recorded in the previous month.
The NBS report further showed that, all major indices increased in October 2019. The food inflation, according to the NBS, rose to 14.09 per cent last month when compared with 13.51 per cent recorded in the previous month. This latest rise in the food inflation was impacted by increases in prices of meat, oils and fats, bread and cereals, potatoes, yam and other tubers, as well as fish and vegetables, NBS said.
During this period, urban inflation stood at 12.20 per cent, up from 11.78 per cent reported in September, while the rural inflation rate rose from 10.77 per cent in September to 11.07 per cent in October.
Similarly, Core inflation, which excludes the prices of volatile agricultural produce, stood at 8.88 per cent in October, moderating by 0.07 percentage point when compared with 8.94 per cent in the preceding review period.
In October 2019, all items inflation rate, on year on year basis was highest in Kebbi (15.20%), Bauchi (13.97%) and Ondo (13.74%), while Kwara (9.69%), Katsina (9.29%) and Bayelsa (9.07%) recorded the slowest rise in headline year on year inflation rate.
On month on month basis however, October 2019 All items inflation rate was highest in Benue (2.20%), Bauchi (1.87%) and Cross River (1.80%). Anambra recorded the slowest rise at 0.28%, while Bayelsa and Ebonyi saw decline in the headline month on month index by -0.13% and -0.35% respectively.
State Profile
In the period under review, food inflation rate on a year on year basis was highest in Kebbi (17.53%), Ondo (17.01%) and Ogun (17.00%), while Kogi (12.12%), Katsina (11.18%) and Bayelsa (9.55%) recorded the slowest rise.
On month on month basis however, October 2019 food inflation rate was highest in Oyo (2.56%), Osun (2.52%) and Lagos (2.05%) while Enugu (0.24%) and Abuja (0.14%) saw the slowest increases in month on month food inflation rate. Bayelsa, at -0.35%, recorded price deflation or negative inflation (that is, a decrease in the general price level of food or a negative food inflation rate).
In September, the NBS had said there was not enough time in the month of August for any significant impact to be felt either way on prices following the Nigerian border closures, which took effect on 20 August, 2019. The federal government has since extended the border closure till January 2020, as the government maintained its stand on the closure of the border until the neighboring countries comply with standards of cross border movement of goods.
Similarly, InsideBusiness reported in September that the border closure was beginning to impact negatively on the prices of goods and services like rice, frozen foods and vegetable oil as well as other items hitherto smuggled into the country.
The implication of this latest increase in the inflation rate on the consumers, is that they will spend more to purchase less goods and services, which will have multiplier effect on all other household expenditures.
It also suggests a potential deterioration in consumers’ income as consumption may drop significantly following an increase in inflation, hence companies’ production will drop which will also result in sharp decrease in revenue, as aggregate demand plunges. This is the nation’s rise the prices of goods and services in 17 months.
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