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Nigeria’s Inflation rate drops to 11.02% in August 2019 despite border closures

Nigeria’s  inflation rate has dropped again to 11.02% in August 2019. This was revealed in the latest inflation report released by the NBS. According to the NBS report, inflation dropped lower than the 11.08% recorded in July

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Nigeria's inflation rate and food price index

Nigeria’s consumer price index, which measures inflation dropped to 11.02% in August 2019. This was revealed in the latest inflation report released by the National Bureau of Statistics (NBS).

According to the NBS report, inflation dropped by 0.06% points year-on-year, lower than the 11.08% recorded in July and 11.22% rate for June 2019.

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Similarly, food inflation dropped to 13.17% from 13.39%, while core inflation dropped to 8.68% from 8.80% recorded in the previous month.

The Food Index: In August 2019, food inflation slowed down at 13.17% from 13.39% recorded in the previous month. The average change of the food sub-index over the 12-months average was 13.45%, which was 0.002% lower higher than the average annual rate of change (13.46%) recorded in July 2019.

According to the Bureau, the rise in the food index was caused by increase in prices of oils and fats, meat, bread and cereals, potatoes, yam and other tubers and fish.

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On a month-on-month basis, the food sub-index increased by 1.22% in August 2019, down by 0.04% points from 1.26% recorded in July 2019.

[READ MORE: Devaluation relief: Nigeria is set to gain big from Saudi Aramco Attack]

Core Inflation: Nigeria’s core inflation, which proxies all items less farm produce, stood at 8.68% in August 2019 as against 8.80%. On a month-on-month basis, the core inflation sub-index increased by 0.67% from 0.77% recorded in July.

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NBS revealed that the highest increases were recorded in prices of cleaning, repair and hire of clothing, repair of household appliances, hospital services, glassware, tableware and household utensils, passenger transport by air and repair and hire of footwear.

Rural and Urban Inflation: The report shows that urban inflation rose to 11.48% from 11.43% recorded in July, while the rural inflation rate increased by 10.61% from 10.64%. On a month-on-month basis, the urban index rose by 1.10% in June 2019, up by 0.05point.

On a month-on-month basis, the urban index rose by 1.04% in August 2019, down by 0.03 from 1.07% recorded in July 2019, while the rural index also rose by 0.93% in August 2019, down by 0.03 points from the rate recorded in July 2019 (0.96%).

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Insights: According to the latest inflation report, all major indices slowed except urban inflation year on year.

  • According to the NBS, the drop in inflation in the Nigerian economy continued in August 2019 despite several pronouncements regarding restrictions on the import of some food items, minimum wage and the recent border closure.
  • However, the Bureau noted in its report that the border was only closed on 20th August 2019 with only 11 days of 31days, hence, the significant impact of the border closure has not yet reflected either way on prices.
  • The latest inflation report implies a slow rise in the prices of goods. The drop does not necessarily mean market prices of goods have dropped but price items only witnessed a slow rise.
  • While the inflation rate for August slowed down, the effect of border closure and other recent policies may affect inflation outlook in the coming months. Experts have opined that the border closure might drive up inflation in no distant time.
  • Meanwhile, the NBS noted that the harvest season, existing weak consumer demand and their natural effect to slow down food and other prices are various reasons that determine the direction of inflation.

On the side-line, key economic agents respond differently to movements in an important indicator like inflation. Specifically, a slow rise in inflation can largely improve investors’ confidence due to the growth prospect it suggests.

  • The latest slowed down in inflation suggests potential improvement in business activities, as consumption in the economy may rise following a drop in inflation. Hence, companies’ revenue may equally improve as aggregate demand inches up.
  • To individuals, this means an improvement in the purchasing power of the consumers to buy goods and services. That is, the ability to buy more with the same income level.
  • Lastly, for policymakers, the latest drop in inflation rate reinforces recent policy measures that are targeted at driving Nigeria’s inflation rate to a single digit.

[READ ALSO: U.S returns to Nigerian Oil, imports N349 billion crude oil in three months]

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Coronavirus

Former Liberian President to sit on WHO review panel of COVID-19 response effort

Ellen Sirleaf has been picked alongside Helen Clark, to serve as co-chairs of the independent panel.

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Former Liberian President to sit on WHO review panel of Covid-19 response effort

Following stern criticism by US President, Donald Trump, over their handling of the COVID-19 response efforts, the World Health Organization (WHO) has announced it will implement an independent panel to review said response efforts to the pandemic.

To this end, Liberia’s former President and West Africa’s first female President, Ellen Johnson Sirleaf, has been picked alongside former Prime Minister of New Zealand, Helen Clark, to serve as co-chairs of the independent panel. They will be responsible for selecting the other members of the panel, according to the WHO.

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WHO’s Director-General, Tedros Adhanom, announced the panel will produce an interim report in a November meeting of global health ministers. Meanwhile, the substantive report would be produced by May 2021.

Tedros also said that the size of the pandemic calls for the need for a “commensurate evaluation, an honest evaluation”, adding that the WHO would be very serious with the preparation of the report.

READ MORE:COVID-19: WHO warns worst is yet to come as firm charges $2,340 for virus treatment

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The WHO members in May agreed to an independent review of the organization’s response to the pandemic. Ellen Johnson Sirleaf said the review of the body’s response would be challenging but looks forward to her role in doing what she can contribute to the response of the pandemic’s challenges.

The panel will also report monthly updates on the body’s response and will not only review the WHO’s response but also the International community’s response. Tedros added that it’s time for an honest reflection on the global response, saying a response will help with lessons on the pandemic.

 

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Economy & Politics

Presidency dismisses allegation of Osinbajo receiving N4 billion from recovered loots

The accusation was described to be an obvious campaign of lies and calumny.

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Twitter deactivate Yemi Osinbajo's Twitter account, How Nigeria's LPG sector can create 2 million jobs -Osinbajo, budget support, NEC okays $250 million investment in NSIA , MSMEClinic gets 200,000 capacity yam storage facility in Benue, Accusations of Yemi Osinbajo receiving N4 Billion from recovered loots are baseless- Presidency

The office of the Vice President has reacted to a series of tweets accusing Professor Yemi Osinbajo of instructing the embattled acting Chairman of the EFCC, Ibrahim Magu, to release the sum of N4 billion out of N39 billion that was recovered from alleged looters. 

These allegations have been described as “false and baseless”. 

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READ ALSO: UPDATE: President Buhari appoints Prof. Gambari as new Chief of Staff

A statement that was signed by the Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, said, with all emphasis at our disposal, let it be firmly stated that these are totally false and baseless fabrications purposing to reflect goings-on at the probe panel investigating Mr Ibrahim Magu”. 

Ibrahim Magu was relieved of his duties this week, after a probe was conducted on his activities as Acting Chairman of the nation’s anti-graft agency. He has since been replaced with Mohammed Umar. 

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READ MORE: Just In: DSS invites EFCC’s Acting Chairman, Ibrahim Magu for questioning)

Meanwhile, the statement by the Presidency also complained about the recent rise in people being paid to “peddle blatant falsehoods” against the Vice President and says Mr Osinbajo “will not be distracted by these obvious campaigns of lies and calumny”. 

The statement added that the online publications “being criminally defamatory in nature”  have been referred to law enforcement agencies for investigation. 

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Explore economic research data from Nairametrics on Nairalytics

 

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Financial Services

Stanbic IBTC observes closed period, as directors set to consider H1 results

The directors will also consider a proposal to pay an interim dividend to shareholders.

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Stanbic IBTC

Stanbic IBTC Holdings Plc announced earlier today that its board of directors will meet on Wednesday, July 29, as part of preparations towards the release of the company’s consolidated and separate audited financial statements for half-year 2020. The directors will also consider a proposal to pay the company’s shareholders an interim dividend.

A statement issued by the Stanbic IBTC to the Nigerian Stock Exchange (NSE) noted that the scheduled board meeting is in tandem with guidelines contained in section 1.2 of the NSE’s rules book.

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In the meantime, the bank Hold-Co has already commenced observing its closed period ahead of the release of the half-year financial statements. Specifically, Stanbic IBTC began observing its closed period on June 1st, 2020, the implication being that all insiders and their relatives have been prohibited from trading the company’s shares for more than one month now.

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Note that the Stanbic IBTC’s closed period will continue until the half-year financial statements are released. Part of the statement which was signed by Chidi Okezie (Company Secretary), said:

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“In accordance with the provisions of Section 1.2 of the Rules of The Nigerian Stock Exchange (The NSE) relating to Board Meetings and General Meetings of Issuers, we would like to notify The NSE and our Shareholders, that a meeting of the Board of Directors of Stanbic IBTC Holdings PLC (the Company) is scheduled to hold on Wednesday 29 July 2020 at 1:00 pm. The meeting will discuss amongst other items, the Company’s Consolidated and Separate Audited Financial Statements for the Half-year ended 30 June 2020 as well as a proposed interim dividend.

READ ALSO: COVID-19: NSE extends time for submission of audited financial statements

“In view of the above, the closed period for the release of half-year results, which commenced on Monday, 01 June 2020 will continue to be in effect until the release of the Company’s Half-year audited financial statements.”

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Recall that the last earnings report that was released by Stanbic IBTC Holdings Plc was for Q1 2020. The unaudited report showed that gross earnings stood at N61.4 billion as against N58.7 billion in Q1 2019, even though interest income for the period declined by 12% year on year to N27.5 billion. Meanwhile, profit for the period stood at N20.6 billion, an increase when compared to N19.2 billion in Q1 2019.

Stanbic IBTC Holdings’ share price closed at N30.25 at the end of today’s trading session on the Nigerian Stock Exchange. Year to date, the stock has declined by nearly -20%.

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