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Key Highlights 

  • Inflation rate stood at 11.23% in August.
  • Inflation rate reduces by 0.09% from August.
  • Inflation rate increased by 1.05% on month-on-month basis.
  • Food inflation stood at 13.16% in August.
  • Core Inflation stood at 10.00% in August.

The National Bureau of Statistics (NBS), has released the Consumer Price Index (CPI) for August 2018. The CPI measures the average change over time in prices of goods and services consumed by people for day-to-day living.

The report shows inflation increased by 11.23% year-on-year, which is 0.09% higher than the recorded rate in July 2018 (11.14%). This is the first year on year rise, after eighteenth consecutive months of disinflation, since January 2017.

Core Inflation 

According to the NBS report, core inflation stood at 10.00% and decreased by 0.2% in the month of August from the 10.2% recorded in July. On a month on basis, it rose by 0.78% in the period under review. It was down by 0.03%, when compared with 0.81% recorded in July.


However, the percentage change in the average composite CPI for the twelve-month period ending August, 2018 over the average of the CPI for the previous twelve-month period was 11.28%, which is a reduction of 0.2% from 11.48% recorded in July.

Food Inflation 

The Composite Food Index rose by 13.16%, during the period under review, compared to 12.85% in July 2018. The figure shows food inflation has increased on year on year basis, for the first time in ten months. The reduction was caused by the increase in prices of potatoes, yam and other tubers, fish, bread, fish, Oil and fats, vegetables and fruits.

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Also, on a month-on-month basis, the Food sub-index increased by 1.42% in the month of August 2018, it went up by 0.02% from 1.40% that was recorded in the previous month of July.

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The CPI report also shows that the average annual rate of change of the Food sub-index for the twelve-month period ending August 2018 over the previous twelve-month average was 16.50%, which is a reduction of 0.6% from the average annual rate of change recorded in the month of July (17.10%).

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Urban Inflation

Meanwhile, the report equally shows that there is a 11.67% increase in the urban inflation rate (year-on-year) in August 2018 from 11.66% recorded in the previous month of July 2018. The rural inflation rate also increased by 10.84%, from 10.83% recorded in the previous month of July 2018.

In the same vein, the Urban Index rose by 1.00% in August 2018 from 1.23% recorded in July, which shows a reduction of 0.23% on a month-on-month basis. For Rural Index, it also rose by 0.96%, from the recorded figure of 1.18% in the previous month of July.

The corresponding 12-month year-on-year rural inflation rate in the period under review is 13.21% compared to 13.64% in July 2018 while the corresponding urban index was 13.95% in August, which is less than 14.33% reported in July, 2018.


All Items Inflation (states)

Meanwhile, during the month under review, Yobe State recorded the highest all-items-inflation with a figure of 12.90%. Lagos State (12.64%) and Enugu State (12.52%) followed in that order, while Kwara State (8.25%) recorded the slowest rise in price during the period. Borno followed with 9.88% while Benue recorded 10.11% on a year-on-year all item basis in August, 2018.


For investors, rising inflation means higher yields on treasury bills and other government securities. For select borrowers, the rise in inflation, in theory, should lead to higher rates.

This reverse in inflation rate, after 18 consecutive months of disinflation has not come as a surprise for many economic analysts. For example, only a few days ago, Nairametrics took a deep look at key macro economic indices in the second quarter of 2018 and concluded that the Nigerian economy seems to have lost the little recovery it made, since exiting recession in Q2 2017 and that the economy is now struggling.  


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