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Inflation rate jumps to 11.98% as border closure drags on

Nigeria’s inflation rate rose year on year to 11.98% in December 2019. According to the NBS, the rise in the food index was caused by increases in prices of Bread and cereals, Oils and fats, Meat, Potatoes, Yam and other tubers, Fish and Vegetables

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Inflation rate jumps to 11.98% as border closure drags on

Nigeria’s inflation rate rose year on year from 11.44% as at the end of 2018 to 11.98% by December 2019. This was disclosed in the latest inflation report released by the National Bureau of Statistics (NBS).

According to the NBS report, month on month, inflation rose by 11.98% in December, higher than the rate (11.85%) recorded in November 2019 and 11.61% in October. The inflation rate in Nigeria rose for the 4th consecutive month as the spiral effect of border closure continues to drag on the economy.

Food Inflation

Food inflation, a closely watched component of the inflation index, rose by 14.67% in December 2019 compared to 14.48% recorded in November 2019. According to the NBS, the rise in the food index was caused by increases in prices of Bread and cereals, Meat, Fish, Oils and fats, Potatoes, yam and other tubers.

On a month-on-month basis, the food sub-index rose by 0.97% in December 2019, down by 0.28% points from 1.25% recorded in November 2019. The average annual rate of change of the Food sub-index for the twelve-month period ending December 2019 was 13.74% from November 2019 (13.65%).

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Core Inflation

On the other hand, Core inflation (All items less farm produce), which excludes the prices of volatile agricultural produce also rose 9.33% in December 2019, up by 0.34% when compared with 8.99% recorded in November 2019.

On a month-on-month basis, the core sub-index increased by 0.81% in December 2019. This was up by 0.02% when compared with 0.79% recorded in November 2019.

Also, the average 12-month annual rate of change of the index was 9.15% for the twelve-month period ending December 2019; this is 0.04 percent points lower than 9.19 percent recorded in November 2019.

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[READ: Pension funds are in trouble as inflation erodes asset values by 100%]

Rural and Urban Inflation

Similarly, the urban inflation rate increased by 12.62% (year-on-year) in December 2019 from 12.47% recorded in November 2019, while the rural inflation rate increased by 11.41% in December 2019 from 11.30% in November 2019.

On a month-on-month basis, the urban index rose by 0.90% in December 2019, down from 1.07 percent recorded in the previous month, while the rural index also rose by 0.82% in December 2019, down from 0.98 recorded in November 2019.

Inflation spikes on border closure and demand pressure

According to the Bureau, core inflation was triggered by increases in prices of Hospital services, Hairdressing salons and personal grooming establishment, Garments, Repair and hire of footwear, Vehicle spare parts, Passenger transport by air, Shoes and other footwear, Appliances, articles and products for personal care, Clothing materials, other articles of clothing and clothing accessories and Cleaning, Repair and hire of clothing.

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[READ: Understand everything about rise and fall in Inflation rate]

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  • Meanwhile, the rise in December may not come as a surprise as Nigerians continue to grapple with the effects of the border closure.
  • Also, the surge in the demand for household items during the Christmas festivity must have piled up pressures on prices. Towards the year-end, Nigerians typically spend on household items such as food, fashion and gift items.
  • Nairametrics had earlier reported that an up thick in inflation is still expected through 2019 on the backdrop of border closure and seasonality.
  • Meanwhile, the latest increase in the inflation rate means the purchasing power of consumers and investors’ returns continue to worsen in the country.
  • Most investors aim to increase their long-term purchasing power. However, Inflation puts this goal at risk because returns on investment must first keep up with the rate of inflation in order to increase real purchasing power.
  • For instance, the rate of interest on most fixed income securities remains the same until maturity, hence, the purchasing power of the interest payments declines as inflation rises.

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Economy & Politics

Uganda Elections: Museveni re-elected for 6th term with 58.6% of the votes

Uganda’s President Museveni has won a 6th term in office as the opposition alleges wide-scale rigging.

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The President of Uganda, Yoweri Museveni, has been re-elected as President, gathering 5.85 million votes compared to 3.48 million votes by main opposition leader, Robert Kyagulanyi, a.k.a Bobi Wine.

According to Reuters, this victory represents 58.6% of the vote cast while Bobi Wine got 34.8%

Bobi Wine announced that the election results show this is the most fraudulent election in the history of Uganda and urged his followers to reject the result.

What you should know

  • Yoweri Museveni, aged 76, has been President of the East African nation since 1986.
  • Bobi Wine claimed via his official Twitter handle that military men jumped over his fence and took control of his home yesterday.

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Coronavirus

Combined Vaccine Manufacturing capacity to hit 6.8 billion doses in 2021

COVID-19 vaccine manufacturing capacity is expected to hit 6.8 billion doses in 2021.

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Covid-19: First world nations oppose waiving intellectual rights for vaccine development

Meristem Group disclosed that the combined effort in manufacturing COVID-19 vaccines for global use is expected to yield about 6.8 billion doses in 2021.

This was revealed in the Annual Outlook 2021 report presented by Meristem Group, titled Bracing for a different future.”

According to the report, the existing manufacturing capacity will only be sufficient enough to immunize about 44% of the global population, which would create obvious vaccination gap and make the pandemic last longer than necessary.

The report states,

  • The cold temperature requirements for vaccine storage pose major logistics concern particularly in Sub-Saharan Africa and other low-income countries. WHO estimates that about 50% of vaccines are wasted every year, largely due to a lack of temperature control.”

According to the report, the estimated 6.8billion doses are expected to be collaboratively manufactured as follows:  CanSino – 0.2billion, AstraZeneca – 3.0 billion, Gamaleya – 0.3billion, Moderna – 0.4billion, Pfizer-BioNtech – 1.3billion, SinoPharm – 1billion, and SinoVac – 0.6billion.

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What you should know

  • The global population as of 2020 is 7.8billion and 70% is required to achieve herd immunity (otherwise called herd protection)
  • Herd Immunity or herd protection is achieved when you have most of the population immunized against an infectious disease.
  • 2 doses of the vaccines are required for each person for immunity.
  • It is expected that between 11 and 15 billion doses would be required to achieve the desired herd immunity, globally.
  • From all indications, herd immunity may not be achieved until mid or late 2022, with the subsisting 100% vaccine production capacity utilization in 2021 – with neither production nor distribution losses.
  • To achieve regulatory approval, a vaccine must undergo a three-stage clinical development process after the exploratory and pre-clinical stages and the U.S Food and Drug Administration (FDA) sets a phase 3 efficacy benchmark of 50%.

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Coronavirus

Covid-19: Global deaths surpass 2 million

Global casualty record for the Covid-19 pandemic surpassed 2 million deaths on Friday.

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Nigeria blows past 40,000 COVID-19 cases

The Global casualty record for the Covid-19 pandemic surpassed 2 million deaths on Friday, with the United States accounting for 1 in every 5 deaths, as it has recorded over 386,000 casualties so far.

This was disclosed in a report by Reuters in its Covid-19 tally reported on Friday evening.

After the United States, Brazil, Mexico, India and the U.K contribute nearly 50% of the combined casualties.

The report also disclosed that an average of 11,900 casualties are recorded per day in year 2021, despite the fact that it took 9 months for the world to record 1 million casualties.

United Nations Secretary-General, Antonio Guterres, said the 2 million death count was “a heart-wrenching milestone.”

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  • “Behind this staggering number are names and faces: the smile now only a memory, the seat forever empty at the dinner table, the room that echoes with the silence of a loved one,” he added.

The WHO warned that 2021 could be tougher due to the nature of new variants which transmit the disease faster.

  • “We are going into a second year of this. It could even be tougher given the transmission dynamics and some of the issues that we are seeing,” WHO Chief, Mike Ryan, said.

Analysts expect the global death toll to surpass 3 million by April 2021.

What you should know 

  • Nairametrics reported that the total number of covid-19 cases in Nigeria had surpassed the 100,000 mark on Sunday 10th January 2021, according to the Nigeria Centre for Disease Control.
  • The African Union stated that it secured 270 million Covid-19 vaccine doses for the continent from drug manufacturers to supplement the COVAX programme, a step towards the commencement of the complex task of vaccinating over 1.2 billion people with limited financial resources.
  • The Nigeria Centre for Disease Control on Friday 15th January 2021, announced that 1,867 new cases of the covid-19 virus were recorded across 24 states in the country. This represents the highest number of cases recorded in a single day.

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