Nigeria inflation inches up in September to 11.24%

Higher food prices helped push up annual inflation in Nigeria last month after three consecutive months of declines, the National Bureau of Statistics has said. The general rise in prices of goods and services was 11.24 per cent in September from 11.02 per cent in August, which was its lowest in almost four years. Inflation had been falling steadily since May. The Bureau in its September report said  “The consumer price index, (CPI) which measures inflation increased by 11.24 percent (year-on-year) in September 2019. This is 0.22 percent points higher than the rate recorded in August 2019.  Increases were recorded in all COICOP divisions that yielded the Headline index. On month-on-month basis, the Headline index increased by 1.04 percent in September 2019, this is 0.05 percent rate higher than the rate recorded in August 2019 (0.99) percent”. 

It further said :On month-on-month basis, the core sub-index increased by 0.89 percent in September 2019. This was up by 0.22 percent when compared with 0.67 percent recorded in August 2019. The highest increases were recorded in prices of Cleaning, Repair and hire of clothing, Repair of household appliance, Hospital services, Major household appliances, Glassware, tableware and household utensils, Spirits, Clothing materials, other articles of clothing accessories, Garment and Repair and hire of footwear. The average 12-month annual rate of change of the index was 9.34 percent for the twelve-month period ending September 2019; this is 0.07 percent points lower than 9.41 percent recorded in August 2019.  On a month-on-month basis, the urban index rose by 1.13 percent in September 2019, up by 0.09 from 1.04 percent recorded in August 2019, while the rural index also rose by 0.96  percent in September 2019, up by 0.03 from the rate recorded in August2019 (0.93)percent. The corresponding twelve-month year-on-year average percentage change for the urban index is 11.63 per cent in September 2019. This is higher than 11.62 per cent reported in August 2019, while the corresponding rural inflation rate in September 2019 is 10.94 percent compared to 10.95 percent recorded in August 2019. 

“The percentage change in the average composite CPI for the twelve months period ending September 2019 over the average of the CPI for the previous twelve months period was 11.268 percent, showing 0.003 percent point from 11.271 percent recorded in August 2019. The urban inflation rate increased by 11.78 percent (year-on-year) in September 2019 from 11.48 percent recorded in August 2019, while the rural inflation rate increased by 10.77 percent in September 2019 from 10.61 percent in August 2019.  The composite food index rose by 13.51 percent in September 2019 compared to 13.17 percent in August 2019. This rise in the food index was caused by increases in prices of Bread and cereals, Oils and fats, Meat, Potatoes, Yam and other tubers, Fish and Vegetables. 

“On month-on-month basis, the food sub-index increased by 1.30 percent in September 2019, up by 0.08 percent points from 1.22 percent recorded in August 2019. The average annual rate of change of the Food sub-index for the twelve-month period ending September 2019 over the previous twelve-month average was13.47percent,0.01 percent points from the average annual rate of change recorded in August 2019 (13.46) percent. The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 8.94 percent in September 2019, up by 0.26 percent when compared with 8.68 percent recorded in August 2019. In analysing price movements under this section, note that the CPI is weighted by consumption expenditure patterns which differ across states. Accordingly, the weight assigned to a particular food or non-food item may differ from state to state making interstate comparisons of consumption basket inadvisable and potentially misleading. “In September 2019, all items inflation on year on year basis was highest in Kebbi (14.09%), Bauchi (13.74%) andPlateau(13.25%),whileDelta(9.72%), Bayelsa(9.40%) and Kwara (8.46%) recorded the slowest rise in headline Year on Year inflation. 

“On month on month basis however, September 2019 all items inflation was highest in Kogi (3.18%),Ondo (2.17%) and Kwara (2.02%), while Kano (0.45%), River (0.41%) and Zamfara (0.33%) recorded the slowest rise.  In September 2019, food inflation on a year on year basis was highest in Niger (16.65%), Nasarawa (16.57%) and Abuja (16.31%), while Akwa Ibom (11.72%), Benue (11.22%) and Bayelsa (9.95%) recorded the slowest rise. On month on month basis however, September 2019 food inflation was highest in Kogi (4.90%), Delta (3.82%) and Kwara (3.70%), while Kano (0.18%) and Zamfara (0.17%) recorded the slowest rise with River recording price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate)”. 

The International Monetary Fund said last week that the planned introduction of a sales tax to partly finance the government’s record 2020 budget and a new minimum wage could help drive up inflation. Tuesday’s data showed food price inflation, the main driver of overall inflation rose to 13.51% in September from 13.17% a month earlier. In August, the government partially closed its western border with Benin to curb rice smuggling which it says is threatening attempts to boost domestic production. The government wants Nigeria to be self-sufficient in rice and has imposed import controls but these have kept prices high and led to smuggling from Benin into Nigeria.

Governor Godwin Emefiele has said the central bank will maintain its tight monetary stance in 2019, and sees inflation at 11.31%, rising to 12% this year before moderating. Inflation peaked at 18.7% in January 2018 and has been in double digits for three years.

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