Nigeria inflation rises by 0.7% to 12.2%

The Consumer Price Index (CPI), which measures inflation increased to 12.20 per cent (year-on-year) in February compared to 12.13 per cent in the preceding month, according to the National Bureau of Statistics (NBS).

This is 0.07 per cent higher than the rate of 12.13per cent recorded in January 2020 and the highest rise since April 2018.

According to the report, core inflation, which excludes the prices of volatile agricultural produce increased to 9.43 per cent in February, up by 0.08 per cent when compared with 9.35 per cent in January

Increments were recorded in all subsets of the consumer price indexes as Urban and rural inflation rate increased year-on-year by 12.85 per cent and 11.61 per cent in February from 12.78 per cent and 11.54 per cent recorded in January respectively.

Food inflation increased to 14.90 per cent compared to 14.85 per cent in January witnessing increases in prices of bread and cereals, fish, meat, vegetables, and oils and fats.

The composite food index increased by 14.9 per cent in the month under consideration compared to 14.85 per cent recorded in the month of January. A rise that is attributed to the increase in prices of major household commodities such as; Bread and Cereals, Fish, Meat, Vegetables and Fats & Oils.

However, on a month-on-month basis, the food sub-index declined by 0.12 per cent points compared 0.99% recorded in January to stand at 0.87 per cent.

The “All items less farm produce” also known as Core inflation which excludes the prices of volatile agricultural produce increased by 9.43 per cent in February 2020. A figure that is 0.08 per cent higher when compared to 9.35 per cent recorded in the previous month.

Inflation drivers: The highest increases were recorded in prices of Pharmaceutical products, Catering services, Air transport, Furniture repair, Repair and maintenance of personal transport equipment, Water supply, Major household appliances, Dental services, carpet and other floor coverings, Vehicle spare parts and Non-durable household goods.

Considering states across the country, the data showed that the food inflation was highest in Sokoto State with 17.12 per cent (year-on-year), followed by Plateau State (16.99%), Gombe State (16.96%), Edo State (16.71%) and Kano State with food index of 16.45 per cent.

Also, Bauchi State recorded the worst hit in terms of All items inflation with 14.47 per cent rate followed by Niger State, which recorded 14.06 per cent inflation rate. Other states include Plateau (13.98%), Sokoto (13.96%) and Kano (13.86%).

Meanwhile, Bayelsa, Katsina, Bauchi states led the list of states with the lowest food inflation rate with 11.89 per cent, 13.04 per cent and 13.04 per cent respectively while Nasarawa and Ondo States followed with 13.5 per cent and 13.53 per cent.

What this latest inflation rate means is that the purchasing power of consumers has worsened and their ability to afford them same quantity of goods or services has reduced despite income level maintaining status quo.

With the virus (COVID 19) scaring off Investors and oil price-reducing globally, the inflation rate is feared to still rise above 12.3%. As noted by Bismarck Rewane in a recent article published by Nairametrics that the implementation of the new VAT rate of 7.5 per cent in February 2020 contributed to the upward trend of the inflation rate and so would the increase in electricity tariff in April.