As the country battles with the economic downturn that came with the COVID-19 pandemic, Nigeria’s inflation rate hits it’s highest in 24 months.
According to the latest CPI report released by the National Bureau of Statistics (NBS), inflation rate increased by 12.34% (year-on-year) in April 2020 from 12.26% recorded in March 2020.
On a month-on-month basis, the index increased by 1.02% in April 2020, a 0.18% rate higher than 0.84% recorded in the previous month.
The composite food index increased by 15.03% in April 2020 0.03 points higher, compared to 14.98% recorded in March 2020.
On a month-on-month basis, the closely watched component of the inflation index increased by 1.18% in April 2020, up by 0.24% points compared to 0.94% recorded in March 2020.
According to the report, the rise in the food index was caused by increases in prices of Potatoes, yam and other tubers, Fish, Oils and fats, Meat, Fruits, Bread and cereals, and Vegetables.
Core inflation (All items less farm produce) which excludes the prices of volatile agricultural produce stood at 9.98% in April 2020, a 0.25% increase when compared to 9.73% recorded in March 2020.
On a month-on-month basis, the core sub-index increased by 0.93% in April 2020, up by 0.13% when compared with 0.8% recorded in the previous month.
The highest increases according to the report, were recorded in prices of Bicycle, passenger transport by road, passenger transport by sea and inland waterways, paramedical services, Hospital services, pharmaceutical products, Medical services, Motorcycles, and Major household appliances whether electronic or not.
Worst hit states
Bauchi state recorded the highest year-on-year inflation rate of 14.44% followed by Rivers state with 14.16% and Sokoto state, which recorded a 13.99% inflation rate. Meanwhile the states with the lowest rise in inflation rate were Kwara (8.98%), Abuja (10.8%), and Edo state with 10.87%.
Sokoto state also recorded the highest year-on-year food inflation rate, followed by Abuja with 17.65% and Akwa Ibom, which recorded 17.55%. On the other hand, Enugu state recorded the slowest rise in food inflation, having recorded a 12.89% increase, followed by Edo state with 12.9% and Ebonyi state with 13.04%.
The latest inflation report implies a fast rise in the prices of overall goods and services in the economy, caused by the lockdown procedure in response to COVID-19 pandemic and the continual global oil crisis.
It should be noted that the latest increase in the inflation rate means that the purchasing power of consumers to buy goods and services deteriorated.
That is, the ability of consumers to buy the same quantity of goods with a fixed income level has worsened within the period, despite investment yields being low and economic activity practically kept on hold.