By; ONYEKACHI PAUL
The Nigerian Bureau of Statistics (NBS) has unveiled the latest inflation figures, revealing a headline inflation rate of 24.08% for July, up from June’s 22.79%.
This year-on-year surge is in stark contrast to the 19.4% recorded in 2022. The headline inflation metric encompasses both food and energy prices, offering a comprehensive snapshot of price movements.
The computation of the inflation rate relies on the Consumer Price Index (CPI), which gauges the average price fluctuations of goods and services integral to daily life. The CPI amalgamates economic theory, sampling methodologies, and statistical techniques, leveraging data from various surveys to formulate a weighted index reflecting price variations within the Nigerian economy.
Of noteworthy significance within the CPI basket are food and energy prices, exerting substantial influence on the overall index. As such, any escalation in these prices exerts a notable impact on the CPI. NBS data underscores a food inflation rate of 26.98% for July, a year-on-year increase of 1.73%, diverging from June’s 25.25%.
- Core inflation stood at 20.47% in July. Core inflation excludes food and energy prices.
- Kogi, Lagos and Ondo had the highest CPI with 28.45%, 27.30%, and 26.83% respectively. While Borno, Jigawa, and Sokoto recorded the lowest CPI with 20.71%, 20.85%, and 20.92% respectively.
- Food inflation were highest in Kogi, Lagos, and Bayelsa with 34.53%, 32.52%, and 31.31% respectively.
- The Urban inflation rate was 25.83% compared to Rural inflation of 22.49%.
- Food & Non-Alcoholic Bevearages, Housing, Water, Electricity, Gas and others, Clothes and Footwear constitute the largest contribution to the CPI with 12.47%, 4.03%, and 1.84% respectively.
The NBS report attributes the monthly surge in food inflation to elevated prices of essential commodities like bread and cereals, potatoes, yams and other tubers, fish, as well as oil and fats.
In line with these findings, reputable credit rating agency Augusto & Co, in their publication titled “2023 Halftime Report Outlook: Sustaining the Reform Momentum,” has predicted an average inflation rate ranging between 26% and 27% for the year.
Echoing this sentiment, one of the prominent ‘big 4’ audit and consulting firms, PricewaterhouseCoopers (PWC), in their recent release “Nigeria Economic Outlook August 2023,” anticipates that the full ramifications of deregulation will amplify inflation in the coming months.
The projection is that the price of Premium Motor Spirit (PMS) will likely persist in its upward trajectory in the short to medium term, accentuating inflationary pressures.