The pace at which prices for goods and services in the country continue to climb, despite greater gasoline costs and a weakening naira, with headline inflation reaching 27.33 percent year on year in October 2023.
According to the most recent National Bureau of Statistics (NBS) inflation figures, the October inflation figure was 0.61 percent higher than the September 2023 figure of 26.72 percent.
On a monthly basis, the headline index fell to 1.91 percent in October, down 36 basis points from the 2.45 percent drop reported in September.
According to the NBS, food inflation grew by 31.52 percent year on year in October 2023, representing a 0.88 percent increase over the previous month’s rate of 30.64 percent.
Commenting on the inflation data, Dr. Isa AbdulMumin, director, Corporate Communications of the Central Bank of Nigeria (CBN), expressed optimism that the low rate of increase in the average price level in October compared to September 2023, was a sign that the Bank’s monetary policy stance to tighten rates and its money market reforms were having the desired effect. Aggressive monetary tightening via different liquidity tools, such as eliminating the cap on the Standing Deposit Facility (SDF) and Open Market Operations, has lifted Open Buy Back (OBB) rates from less than 1% in August to their forecast levels today, which are around the monetary policy rate.
Despite a 0.61 percent increase in headline inflation from 26.72 percent in September 2023 to 27.33 percent in October 2023, Isa remained confident that the CBN was on track to achieve price stability.
According to him, available statistics showed that the first indication of price deceleration was recorded in September, and that subsequent money market reforms, which began in October, had accelerated price easing, as evidenced by the significant drop in month-on-month changes recorded in October.
“Moderation in month-on-month changes in prices observed in the headline, food and core components of the consumer basket followed reforms in the money market and relative stability in the FX market,” he went on to say.
Food inflation has reached 31.5%.
Food inflation, a significant driver of the headline inflation rate in October, continued to grow steadily, hitting 31.52 percent. This represents a 7.80% point gain over the 23.722% reported in October 2022.
According to the National Bureau of Statistics’ most recent CPI report, the increase in food inflation was caused by price increases in bread and cereals, oil and fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables, and milk, cheese, and eggs.
According to the Food and Agriculture Organization, Nigeria has reached an undesirable level of food consumption as a result of a considerable increase in staple food prices caused by increases in fuel prices, inflation, and the high cost of food production.
According to FAO, approximately 26.5 million people, including internally displaced people (IDPs), will face extreme food insecurity between June and August 2024.
It predicted that when the lean season (June to August 2024) approaches, households may witness a mild to moderate decline in food consumption, potentially pushing many states into crisis status.
Kogi, Kwara, and Lagos states had the highest food inflation in October, while Borno, Kebbi, and Jigawa had the least rise.
On a month-to-month basis, however, food inflation in October 2023 was highest in Yobe (5.35%), Sokoto (3.68%), and Jigawa (3.45%), while Edo, Katsina, and Rivers had the least rise in inflation.
In addition, headline inflation jumped to 27.33 percent over the period, compared to 26.72 percent in September 2023.