Soaring Food Prices Pushes Nigeria’s Inflation To 30-Month High At 13.71%

Inflation rates for the month of September in Nigeria soared above analysts’ expectations, attaining its peak since March 2018 at 13.71% year-on-year after climbing 49 basis points up from 13.22% in August.

The culprit, once more, was the heightening food inflation which stood at 16.66% YoY, after rising by 66bps, owing to the lingering insecurity across the country, particularly northern Nigeria which has prevented farmers from accessing their farms. The highest increases were recorded in bread and cereals, potatoes, yam and other tubers, meat, fish, fruits and oils and fats.

There is also the impact of the continued border closure by the Federal Government that continue to pressure prices of goods and services in the absence of domestic alternatives, following which those are successfully smuggled into the country come at exorbitant cost to the end user.

President of the World Bank Group, David Malpass, had on Wednesday, in answer to a question during the World Bank Group’s virtual Annual Meetings Press Conference, urged the Nigerian government to rethink last year’s closure of the nation’s land borders, to facilitate cross border trade and to allow commerce to take place.

Malpass spoke of the need to promote trade facilitation, noting that “between Benin and Nigeria, there are high tariff barriers on rice, which is distortive and expensive, so finding steps that can be done.” (READ MORE)

The percentage change in the average composite Consumer Price Index for the 12-month ending September 2020 over the average of the CPI for the previous 12 months period stood at 12.44%, as against 12.23% recorded in August 2020.

On a month-on-month basis, the urban index rose by 1.56%, as against 1.42% recorded in August 2020, while the rural index also rose by 1.4% in September 2020, from the 1.27% recorded in August 2020.

Urban inflation rate increased by 14.31% (year-on-year) in September 2020 from 13.83% recorded in August 2020, while the rural inflation rate climbed 13.14% in September 2020, compared to 12.65% in the previous month.

Rural inflation rate in September 2020 at 11.86%, increased from 11.66% in August 2020, just as core inflation inched marginally by 6bps to 10.58% y/y, with the most significant pressure seen in the prices of passenger transport by air, Medical services, Hospital services, Pharmaceutical products, Passenger transport by road, motor cars, vehicle spare parts, maintenance and repair of personal transport equipment, repair of furniture and paramedical services.

On a state-by-state basis, according to the data from the National Bureau of Statistics (NBS), inflation was at its peak in Bauchi (north east), where it printed 17.85%; followed by Zamfara (north west), 17.42%; and Kogi (north central), 16.66%. The slowest rise of 10.53% in headline inflation Year-on-Year was seen in Kwara; ahead of Abuja, 10.59%; and Lagos 11.19%.

In September 2020, food inflation YoY was highest in Zamfara at 20.94%, Kogi, 19.06%; while Plateau and Yobe printed 18.90%; just as ondo recorded 13.59%, the

slowest rise during the month; followed by Lagos, 13.87%; and while Nasarawa, 13.94%.

On a month-on-month basis however, September 2020 food inflation was highest in Zamfara, 3.65%; Anambra, 3.19%; and Kaduna, 3.15%. Ondo recorded price deflation or negative inflation (general decrease in the general price level increased by 0.15% in Abuja; followed by Nasarawa, 0.51%.