Food inflation up 16.66% YoY
Nigeria’s inflation rose to 13.71 per cent to its highest in two and half years when the consumer price index averaged 13.34 in March 2018.
According to the latest inflation figures released by the National Bureau of Statistics, NBS on Thursday, the consumer price index, (CPI) increased by 13.71 per cent (year-on-year) in September 2020. This is 0.49 per cent points higher than the rate recorded in August 2020 (13.22) per cent.
“On a month-on-month basis, the Headline index increased by 1.48 per cent in September 2020. This is 0.14 per cent rate higher than the rate recorded in August 2020 (1.34) per cent.
“The percentage change in the average composite CPI for the twelve months period ending September 2020 over the average of the CPI for the previous twelve months period was 12.44 per cent, showing 0.21 per cent point from 12.23 per cent recorded in August 2020,” the NBS stated in the report.
The report said: “On a month-on-month basis, the urban index rose by 1.56 per cent in September 2020, up by 0.14 from 1.42 per cent recorded in August 2020, while the rural index also rose by 1.40 per cent in September 2020, up by 0.13 from the rate recorded in August 2020 (1.27 percent).
“The urban inflation rate increased by 14.31 per cent (year-on-year) in September 2020 from 13.83 per cent recorded in August 2020, while the rural inflation rate increased by 13.14 per cent in September 2020 from 12.65 per cent in August 2020.”
“The corresponding twelve-month year-on-year average percentage change for the urban index is 13.07 per cent in September 2020. This is higher than 12.85 per cent reported in August 2020, while the corresponding rural inflation rate in September 2020 is 11.86 per cent compared to 11.66 per cent recorded in August 2020,” the report added.
SOARING FOOD INFLATION
Meanwhile, a separate food index show that food inflation rose by 16.66 per cent in September 2020 compared to 16.00 per cent in August 2020.
The NBS report noted that “this rise in the food index was caused by increases in prices of Bread and Cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits and Oils and fats”.
On a month-on-month basis, the food sub-index increased by 1.88 per cent in September 2020, up by 0.21 per cent points from 1.67 per cent recorded in August 2020.
BEYOND FOOD INFLATION
However, core inflation, which excludes the prices of volatile agricultural produce, stood at 10.58 per cent in September 2020, up by 0.06 per cent when compared with 10.52 per cent recorded in August 2020.
On a month-on-month basis, the core sub-index increased by 0.94 per cent in September 2020. This was down by 0.11 per cent when compared with 1.05 per cent recorded in August 2020.
The highest increases were recorded in 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.
The average 12-month annual rate of change of the index was 9.77 percent for the twelve-month period ending September 2020; this is 0.13 percent points higher than 9.64 percent recorded in August 2020.
“The average annual rate of change of the Food sub-index for the twelve-month period ending September 2020 over the previous twelve-month average was 15.13 per cent, 0.26 per cent points from the average the annual rate of change recorded in August 2020 (14.87 per cent),” the report said.
WHAT THIS MEANS
The increase in September inflation can only compound the impacts of stagflation. So, the Nigerian economy is currently undergoing a period of stagflation – a period characterised by rising inflation, a decline in GDP and rising unemployment. This only means tougher times head for millions of Nigerians as even though many people continue to grapple with job losses, prices of goods and services will continue to go up.
More so, this portends even more negative impacts on savings as rising inflation continues to erode it. With the interest environment at its lowest, as the Central Bank of Nigeria embarks on expansionary monetary policy measures to boost lending and spur more economic activity, it only means your savings won’t amount to much and will continue to be eroded by rising inflationary pressures.