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Nigeria’s Inflation Hits 13.22% In August, Highest In 28 Months

As predicted by many economic analysts, Nigeria’s consumer price index, (CPI) which measures inflation, increased by 13.22 percent (year-on-year) in August 2020, representing 0.40 percent points higher than the 12.82 percent rate recorded in the preceding month.
According to the National Bureau of Statistics (NBS), the publisher of the report, the August CPI rate, which was the highest rate recorded in 28 months, indicated that increases were recorded in all COICOP divisions that yielded the Headline index.

On a month-on-month basis, the Headline index increased by 1.34 percent in August 2020, reflecting 0.09 percent higher than the 1.25 percent rate recorded in July.

The percentage change in the average composite CPI for the twelve months period ending August 2020 over the average of the CPI for the previous twelve months period was 12.23 percent, representing a 0.18 percent point rise from 12.05 percent recorded in the preceding month.

A further analysis of the CPI Report indicated that urban inflation rate increased by 13.83 percent (year-on-year) in the month under review from 13.40 percent recorded in July, while the rural inflation rate rose by 12.65 percent in August from 12.28 percent recorded in July.

On a month-on-month basis, the urban index rose by 1.42 percent in August 2020, up by 0.15 from 1.27 percent recorded in July 2020, while the rural index also rose by 1.27 percent in August 2020, up by 0.04 from the rate recorded in July 2020 (1.23 percent).

The corresponding twelve-month year-on-year average percentage change for the urban index was 12.85 percent in the month under review. This is higher than 12.66 percent reported in July 2020, while the corresponding rural inflation rate in August was 11.66 percent compared to 11.49 percent recorded in the preceding month.

On the Food Index rate, the composite food index rose by 16.00 percent in August 2020 compared to 15.48 percent in July 2020 due to increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits, Oils and fats and Vegetables.

On month-on-month basis, the food sub-index rose by 1.67 percent, up by 0.15 percent points from 1.52 percent recorded in July.

The NBS reported that the average annual rate of change of the Food sub-index for the twelve-month period ending August 2020 over the previous twelve-month average was 14.87 percent, representing a 0.24 percent points increase from the average annual rate of change recorded in July 2020 (14.63 percent).

According to the agency, the “All items less farm produce” (or Core inflation), which excludes the prices of volatile agricultural produce, rose to 10.52 percent in the month under review, up by 0.42 percent when compared with 10.10 percent recorded in July 2020.

On month-on-month basis, the core sub-index increased by 1.05 percent, representing 0.30 percent rise when compared with 0.75 percent recorded in the preceding month.

The highest increases were recorded in prices of Passenger transport by air, Hospital services, Medical services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Vehicle spare parts, Motor cars, Passenger transport by road, Miscellaneous services relating to the dwelling, Repair of furniture and Paramedical services.

The average 12-month annual rate of change of the index was 9.64 percent for the twelve-month period ending August 2020. This is 0.16 percent points higher than 9.48 percent recorded in July 2020.

An analysis of the CPI trend on state by state basis, the All Items price index on year on year basis was highest in Kogi (17.29%), Bauchi (15.77%) and Ebonyi and Yobe (14.71%), while Lagos (11.45%), Kwara (11.22%) and Abuja (11.17%) recorded the slowest upward swing in headline year on year inflation.

On month on month basis, however, all items inflation was highest in Ondo (2.20%), Ogun (2.07%) and Abia (1.87%), while Plateau (0.72%), Zamfara (0.60%) and Sokoto (0.54%) recorded the slowest rise in headline month on month inflation.

During the month under review, food inflation on a year on year basis was highest in Kogi (22.03%), Kwara (19.11%) and Edo (17.95%), while Gombe (14.33%), Kano (13.99%) and Bauchi (13.42%) recorded the slowest rise.

However, on month on month basis, however, food inflation was highest in Ogun (3.27%), Lagos (3.13%) and Abia (2.81%), while Plateau (0.67%), Zamfara (0.24%) and Sokoto (0.13%), recorded the slowest increase.

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