Data from the National Bureau of Statistics for the month of September 2017 reveals Nigeria’s inflation rate currently stands at about 15.98%, the lowest since May 2016.
Nigeria’s inflation rate galloped into double digits for the most part of 2016 as the effects of the rise in electricity tariffs, the depreciation of the naira propped up prices of goods and services. Inflation rate in 2017 has also remained stubbornly in the double digits even though, it has been on the downward trend since January 2017.
Inflation rate is more appreciated on the national level, with the headline number often applied to Nigeria in general. However, the National Bureau of Statistics also publishes data for state inflation rates. Inflation rate by states is a better indicator of how spread inflation rate is across the country.
Considering that businesses rely on inflation for investment decisions, it is important to look at the rate of inflation in each state compared to the national average. States that are well above the national inflation rate of 15.98% are a potential red flag for discerning investors. The chart below reveals the states with the worst inflation rates as at September 2019.
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The 5 states with the highest inflation rates as at September 2017 are as follows;
Bauchi State – The Northern States tops the chart with a whopping 22% in inflation rate as at September 2017. This is about 6% higher than the national average of 15.9%. Food Inflation in the state is also 14.39%
Nasarawa State – Another state based in the North of Nigeria came second with about 20.6% in inflation rate. The state also has about 27% in Food Inflation rate, the highest we have seen so far this year.
Ebonyi State – This state has an inflation rate of about 20.34% and the third on the list. Its inflation rate is about 5% higher than national average and the highest in the South and South Eastern part of the country
Kebbi State – Another state in the far northern part of Nigeria has an inflation rate of 19.66% about 5% higher than national average. State state also has about 23% in food inflation, the second highest up north.
Kano State – The state of the Emir has about 19.1% in inflation rate for the month of September 2017. It also has a whopping 25.4% in food inflation rates one of the highest in the country. For a state that is considered one of the largest economic hubs in Nigeria this inflation rate is quite high.
Why this matters?
Inflation rate is one of the many factors considered when deciding to invest. Inflation rates that are double digits mostly dissuade investors from investing because no one wants their earnings power depleted. Therefore, states that deplete earnings power via inflation rates are typically a bad sign for investors.
Where was Lagos?
Lagosians currently suffer an inflation rate of 14.51% well below the national average. Food inflation is also still high at 18.42%. Thus, if you have other sources of income but live in Lagos, you are better off targeting businesses that can give you returns of more than 14.51%.