Data from the National Bureau of Statistics (NBS) reveal that Nigeria’s inflation rate increased by 12.20% (year-on-year) in February 2020. This is 0.07% higher than the rate of 12.13% recorded in January 2020 and the highest rise since April 2018.
According to the report, the food index rose from 14.85% recorded in January to 14.9% in February 2020 while core inflation increased by 0.08% to stand at 9.43% compared to 9.35% recorded in the preceding month.
Increments were recorded in all subsets of the consumer price indexes as Urban and rural inflation rate increased year-on-year by 12.85% and 11.61% in February from 12.78% and 11.54% recorded in January respectively.
The composite food index increased by 14.9% in the month under consideration compared to 14.85% recorded in the month of January. A rise that is attributed to increase in prices of major household commodities such as; Bread and Cereals, Fish, Meat, Vegetables and Fats & Oils.
However, on month-on-month basis, the food sub-index declined by 0.12% points compared 0.99% recorded in January to stand at 0.87%.
The “All items less farm produce” also known as Core inflation which excludes the prices of volatile agricultural produce increased by 9.43% in February 2020. A figure that is 0.08% higher when compared to 9.35% recorded in the previous month.
Inflation drivers: The highest increases were recorded in prices of Pharmaceutical products, Catering services, Air transport, Furniture repair, Repair and maintenance of personal transport equipment, Water supply, Major household appliances, Dental services, carpet and other floor coverings, Vehicle spare parts and Non-durable household goods.
Worst hit states
Food inflation was highest in Sokoto State with 17.12% (year-on-year), followed by Plateau State (16.99%), Gombe State (16.96%), Edo State (16.71%) and Kano State with food index of 16.45%.
Also, Bauchi State recorded the worst hit in terms of All items inflation with 14.47% rate followed by Niger State, which recorded 14.06% inflation rate. Other states include Plateau (13.98%), Sokoto (13.96%) and Kano (13.86%).
Meanwhile, Bayelsa, Katsina, Bauchi states led the list of states with lowest food inflation rate with 11.89%, 13.04% and 13.04% respectively while Nasarawa and Ondo States followed with 13.5% and 13.53%.
What this latest inflation rate means is that the purchasing power of consumers has worsen and their ability to afford the same quantity of goods or services has reduced despite income level maintaining status quo.
With the virus (COVID 19) scaring off Investors and oil price reducing globally, inflation rate is feared to still rise above 12.3%. As noted by Bismarck Rewane in a recent article published by Nairametrics that the implementation of new VAT rate of 7.5% in February 2020 contributed to the upward trend of the inflation rate and so would the increase in electricity tariff in April.