Macro-Economic News
Nigeria’s inflation rate hits 14.89% in November 2020 as food inflation spikes
This represents the highest inflation rate recorded in 34 months since January 2018
Nigeria’s inflation rate spiked by 14.89% (year-on-year) in November 2020, which is 0.66% points higher than the rate recorded in October 2020 (14.23%).
This is according to the Consumer Price Index report, recently released by the National Bureau of Statistics (NBS).
According to the report, the latest figure represents the highest inflation rate recorded in 34 months since January 2018, when the rate stood at 15.13%.
On a month-on-month basis, the Headline index increased by 1.6% in November 2020. This is 0.06% points higher than the rate recorded in October 2020 (1.54%).
Food inflation
- The food index rose sharply by 18.3% in November 2020 compared to 17.38% in October 2020, representing 0.92% points higher than the preceding month.
- The closely watched component of the inflation index, rose by 2.04% in November 2020 on a month-on-month basis, up by 0.08% points from 1.96% recorded in October 2020.
- Meanwhile, the rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, yam and other tubers, Meat, Fish, Fruits, Vegetables, and Oils and fats.
Core inflation
- The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 11.05% in November 2020, declined by 0.09% when compared with 11.14% recorded in October 2020.
- On a month-on-month basis, the core sub-index increased by 0.71 percent in November 2020 representing a sharp 0.54% point decline when compared with 1.25% recorded in October 2020.
- The highest increases were recorded in prices of Passenger transport by air, Medical services, Hospital services, Repair of furniture, Passenger transport by road, Maintenance and repair of personal transport equipment, vehicle spare parts, Hairdressing salons and personal grooming establishments, Pharmaceutical products, Paramedical services and Motor cars.
Worst hit states
- In the month under review, Kogi State recorded the highest inflation rate at 19.87%, closely followed by Bauchi State with an inflation rate of 19.67%. Also, Zamfara State recorded an inflation rate of 17.3% while Sokoto and Yobe States recorded 16.97% and 16.44% respectively.
- In terms of food index, Kogi State also recorded the highest rise in inflation rate, followed by Zamfara (20.6%), Sokoto (20.6%) while Ebonyi and Plateau State recorded food inflation of 20.2% and 19.7% respectively.
What this means
Nigerians are still facing the hardship caused by the effect of the Covid-19 lockdown and the sustained land border closure, which has caused the cost of major food items and essential services to skyrocket nationwide.
- Most non-agricultural items that recorded significant increases in the periods were mostly transport services, medical services, and pharmaceutical products.
- As many Nigerians are drawn to be more aware of their health status due to the covid outbreak, increased demand for medical services and health-related products has caused a significant hike in prices.
- While increased travels towards the end of the year must have contributed towards the increases recorded.
- This indicates that the purchasing power of consumers is rapidly declining.
Macro-Economic News
Top Agro food products exported by Nigeria in 2020
Here is a list of the top 10 agro-food products exported by Nigeria in 2020
Nigeria exported agricultural products worth N321.5 billion in 2020, representing a 19.16% increase when compared to N269.8 billion recorded in 2019 and a 6.27% increase compared to N302.28 billion recorded in 2018.
However, despite the increase recorded in export, imported agricultural goods surged by 78.58% in 2020 compared to 2019. Nigeria imported agricultural goods worth N1.71 trillion in 2020 as against N959.5 billion in 2019.
This is according to data tracked by Nairametrics Research from the foreign trade quarterly reports, released by the National Bureau of Statistics (NBS).
- In spite of crude oil, agriculture still remains the base of Nigeria’s economy, providing the main source of livelihood for most Nigerians. The sector remains the largest sector of the Nigerian economy and employs about two-thirds of the entire labour force in the country.
- However, production hurdles have significantly impeded the expected growth. According to the Food and Agricultural Organisation of the United Nations, over the past 20 years, value-added per capita in agriculture has risen by less than 1% annually.
- It is also estimated that Nigeria has lost about $10 billion in annual export opportunities from groundnut, palm oil, cocoa, and cotton alone as a result of the decline in the production of these commodities.
In line with this, it is pertinent to consider the major agricultural products that fetched Nigeria significant cash in 2020, in order to make adequate preparations towards maximising the country’s export potentials.
READ: CBN Commences distribution of grants and inputs worth over N700 million to cocoa Farmers
Sesame seeds – N98.27 billion
Sesame seed comes from a flowering plant mostly grown in Northern Nigeria due to the drought-resistant nature of the seed. It has many uses, but perhaps, its most important use is as a source of sesame oil which is the most demanded vegetable oil in the world because of its zero cholesterol content.
Nigeria has been one of the highest sesame seed-producing countries over the years, making the seed an important component of the country’s agricultural export.
In 2020, Nigeria exported sesame seed abroad to the tune of N98.27 billion. The highest quarterly export was recorded in Q1 2020 (N39.63 billion), before the heat of the pandemic, while the lowest was recorded in Q3 2020 (N15.59 billion).
READ: Top 10 Agricultural Products Export from Nigeria
Cocoa – N87.44 billion
Cocoa is a small perennial tree crop that primarily comes from the three tropical regions in the world; Southeast Asia, Latin America, and West Africa. Cote d’Ivoire is the single largest producer of cocoa beans, accounting for approximately 31% of the world’s supply.
The fruit is an egg-shaped red-to-brown pod that contains about 30 to 40 seeds, each of which is surrounded by a bitter-sweet white pulp. When the seeds are dried and fermented in the sun, they turn brownish red and are known as cocoa beans, which is the principal ingredient of chocolate.
In the year under review, Nigeria exported different variants of cocoa products to a sum of N87.44 billion. Good fermented Nigerian cocoa exported in 2020 was estimated at N45.36 billion, followed by superior quality raw cocoa beans at N36.53 billion, and natural cocoa butter at N3.52 billion.
Other variants of the cocoa product exported by Nigeria in 2020 include; other quality raw cocoa beans at N1.56 billion, other butter of cocoa and deodorised cocoa (N279 million) and roasted cocoa beans worth N190 million.
READ: Nigeria’s cocoa exports to fall by $100m as prices rise in futures market.
Cashew nuts – N45.88 billion
Cashew is a tree crop that has been cultivated for food and medicine for many years. The various parts of the cashew fruits are of economic value, which includes apple, nut, and kernel. The primary product of cashew nuts is the kernel, which is the edible portion of the nut.
In confectionery and bakery products, for example, kernels are used in the production of ice creams, chocolates, cakes, and sweets. Cashew nut shell liquid has also been used in making medicine used for treating various illnesses.
In 2020, Nigeria exported cashew nuts valued at N45.88 billion, with the highest quantity recorded in Q2 2020. The breakdown of cashew nut export shows that cashew nuts, in shell that was exported in the review year was N38.36 billion, while that which is shelled was valued at N7.52 billion.
Frozen foods – N7.78 billion
Nigeria exported various frozen food items in the year 2020, valued at N7.78 billion. Among the frozen food items exported in the period as stated by the National Bureau of Statistics were, other frozen shrimps and prawns, valued at N5.43 billion.
Frozen rock lobster and other sea crawfish (Palinurus spp, Panulirus spp, Jasus spp) stood at N1.98 billion while Hake (Merluccius spp, Urophycis spp), and frozen meat exported was valued at N374 million.
Shea – N6.47 billion
Shea fruits and nuts are “non-timber forest products” that are gathered annually during the shea tree fruiting season that extends from May to September. Shea fruits have an encompassed kernel and nut.
Oil and associated by-products are obtained from crushing the nuts, and these oils are used in creating shea butter, which is further used in making cooking oil, skin and hair moisturizer, soap, waterproof sealant for home walls, lamp fuel, and many more.
It is worth noting that Nigeria exported Shea nuts valued at N6.14 billion in 2020, while shea cake export stood at N337 million in the year under review.
Bubbling under:
- Ginger – N6.15 billion
- Sesame oil – N4.83 billion
- Soya – N3.53 billion
- Coconuts – N3.36 billion
- Flower – N1.58 billion
Why this matters
Nigeria is a country immensely blessed with rich soil texture idle for the practice of crop production; however, we are unable to produce as much for our domestic consumption not to mention receiving adequate export value for our agro products.
- It is no news that there is an international demand for most of Nigeria’s agro products; however, Nigeria spends more importing agricultural products from other countries.
- Some of the major bottlenecks impeding the expected growth in the agricultural sector, despite huge monetary interventions in the sector in recent years, include logistic problems, infrastructure, amongst others.
- According to a PWC report on the current state of Nigeria’s agriculture and agribusiness sector, Nigeria has significantly poor transport infrastructure and services (road and rail), particularly in the rural areas.
- It also identifies the lack of cold chain logistics as a factor contributing to the decrease in trade capacity through losses from spoilage and impinged time to market.
- The limited capacity of Nigeria’s seaport has also affected the ease of cross-border trade.
- Finally, there is a need for Nigeria to improve its agricultural production so as to tap into the large foreign exchange that could come into the country through the export of these items.
Macro-Economic News
Bus fare in Nigeria surges by 78% YoY in February 2021
Fare paid by Nigerian commuters increased from an average of N208.89 recorded in February 2020 to N361.3 in February 2021.
The average fare paid by commuters for a bus journey within the city increased by 78.1% year-on-year in February 2021 to stand at N361.3. This is according to the transport fare watch report, recently released by the National Bureau of Statistics (NBS).
According to the report, the fare paid by Nigerian commuters increased from an average of N208.89 recorded in February 2020 to N361.3 in February 2021. This represents a 78.1% increase in price while it also increased by 2.6% compared to N351.15 recorded in the previous month.
Meanwhile, States with the highest bus journey fare within the city were Zamfara (N620.15), Bauchi (N530.10), and Ekiti (N475.25) while States with the lowest bus journey fare within the city were Oyo (N190.45), Abia (N208.55), and Borno (N250.72).
READ: Nigeria’s inflation rate rises to 17.33% in February 2021, highest in four years
Also, the average fare paid by commuters for bus journey intercity increased by 1.13% month-on-month and by 39.85% year-on-year to N2,372.87 in February 2021 from N2,346.41 recorded in January 2021.
READ: Transport fare watch: Motorcycle “Okada” commuters paid less in January 2021
Air travel
Average fare paid by air passengers for specified routes single journey decreased by 0.02% month-on-month and increased by 17.97% year-on-year to N36,458.11 in February 2021 from N36,463.65 recorded in the previous month.
- States with the highest airfare in February 2021 were Delta/Lagos (N38,600), Anambra/Bayelsa (N38,500), Bauchi (N38,400).
- On the other hand, Akwa-Ibom recorded the lowest fae in the review period (N32,500) followed by Sokoto and Gombe State with N33,600 and N35,000 respectively.
READ: Lagos says transport operators, drivers, conductors, others must get accredited
Motorcycle
The amount paid by Nigerian commuters for journey by motorcycle per drop increased by 2.86% month-on-month and by 97.68% year-on-year to N266.74 in February 2021 from N259.33 recorded in January 2021.
- States with the highest journey fare by motorcycle per drop were Taraba (N436.20), Yobe (N425.02), and Kogi (N400.12) while states with the lowest journey fare by motorcycle per drop were Adamawa (N86.47), Katsina (N140.12), and Kebbi (N155.90).
READ: Lagos bus service limited announces 46% fare increase, to use BRT lanes
Waterways
The average fare paid by passengers for waterway passenger transport increased by 1% month-on-month and by 39.63% year-on-year to N794.02 in February 2021 from N786.19 recorded in January 2021.
- States with the highest fare by waterway passenger transport were Rivers (N2,299.35), Delta (N2,280.33), and Bayelsa (N2,258.49) while states with the lowest fare by water way passenger transport were Borno (N240.55), Gombe (N297.23), and Abuja FCT (N340.22).
READ: Lagos Rail Mass Transit Red Line to be operational by 2022
What this means
The latest figure indicates that Nigerians are spending more on transportation despite the spike recorded in the food prices in the country, especially in the south. Nairametrics had reported that core inflation and food inflation rose to 12.38% and 21.79% respectively in February 2021.
