In a recent report, the National Bureau of Statistics (NBS) disclosed that Nigeria’s inflation rate surged to 25.80% in August 2023, marking a 1.72% increase from the previous month’s figure of 24.08%. This concerning spike comes at a pivotal moment as the new leadership of the Central Bank of Nigeria, led by Olayemi Cardoso, begins its tenure with the daunting task of addressing the nation’s inflation crisis.
According to a report by Vanguard, the NBS attributed the substantial rise in inflation primarily to two significant factors. Firstly, the removal of the petrol subsidy, a contentious economic move, had a considerable impact on consumer prices. Secondly, liquidity challenges in the foreign exchange market further compounded the issue.
Breaking down the inflation numbers, month-on-month inflation increased from 2.89% to 3.18% in the review month. Regarding year-on-year contribution to inflation, food and non-alcoholic beverages took the lead at 13.36%, followed by housing, water, electricity, gas, and other fuel at 4.32%, and clothing and footwear at 1.97%.
Food inflation, a critical concern for many Nigerians, reached a staggering 29.34% year-on-year in August, which is a significant uptick from 23.12% during the same period in 2022. This surge in food inflation can be attributed to rising prices in several essential categories, including oil and fat, bread and cereals, fish, fruits, meats, vegetables, and dairy products.
Additionally, on a month-on-month basis, the food index increased by 3.87%, driven by notable price increases in bread and cereals, potatoes, yams, fish, oils, fats, and coffee, tea, and cocoa.
The core inflation rate, which excludes the prices of volatile agricultural produce and energy, also registered a significant increase. Year-on-year, it soared to 21.15% in August, up by 4.03% from the 17.12% recorded in the same month in 2022. This rise in core inflation can be attributed to increased costs in various sectors, including passenger transport (air and road), medical services, vehicle spare parts, and personal transport equipment maintenance and repairs.
Urban inflation stood at 27.69% annually, marking a substantial increase of 6.73% compared to August 2022. On a month-on-month basis, urban inflation was 3.29% in August, up significantly from 0.24% in July.
Meanwhile, rural inflation reached 24.10% year-on-year, representing a 3.98% increase compared to the same period in the previous year. Month-on-month, the rural index increased by 3.08%, reflecting a 0.34% uptick compared to July.
At the state level, Kogi, Lagos, and Rivers recorded the highest year-on-year inflation rates at 31.50%, 29.17%, and 29.06%, respectively. Conversely, Sokoto, Borno, and Nasarawa experienced the slowest rise in inflation at 20.91%, 21.77%, and 22.25%, respectively.
On a month-on-month basis, Kwara, Osun, and Kogi registered the highest inflation rates at 6.07%, 4.36%, and 4.35%, while Sokoto, Borno, and Ogun witnessed the slowest inflation increases at 1.38%, 1.73%, and 1.89%, respectively.
When examining food inflation, Kogi, Lagos, and Kwara topped the list with the highest year-on-year rates at 38.84%, 36.04%, and 35.33%, respectively. In contrast, Sokoto, Nasarawa, and Jigawa reported the slowest rise in food inflation at 20.09%, 24.35%, and 24.53%, respectively.
On a month-on-month basis, Rivers, Kwara, and Kogi had the highest food inflation rates at 7.12%, 5.89%, and 5.80%. At the same time, Sokoto, Abuja, and Niger witnessed the slowest food inflation increases at 0.50%, 1.30%, and 1.40%, respectively.
Nigeria’s rising inflation rate, particularly in the food sector, underscores the nation’s ongoing economic challenges. The new leadership at the Central Bank of Nigeria faces a formidable task in stabilizing prices and steering the economy towards a more sustainable path. As inflation continues to impact the daily lives of Nigerians, effective policies and strategies become increasingly crucial to mitigate its adverse effects.
