The National Bureau of Statistics (NBS) released Nigeria’s consumer price index report during the week, putting the inflation rate at 20.52% for the month of August 2022. The Bureau also added that food inflation rose to 23.12% from 22.02% recorded in the previous month, while core inflation accelerated to 17.2%.
The rise in the nation’s inflation rate, which continues to erode the purchasing power of the citizens was attributed to the rising cost of food items across the country, amidst sustained surge in energy prices, transportation costs. Prominent among these, is the imported food inflation.
Similarly, the exchange rate at the official Investors and Exporters widow remained stable albeit on the high side, closing at N436.25/$1 on Friday, 16th September 2022. Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) reported that Nigeria’s crude oil production fell to an average of 972,000 barrels per day.
Nairametrics compiles a list of notable economic items that made the headlines with the newsbreak.
Inflation rate hits 15-year high of 20.52%
Nigeria’s inflation rate surged further to 20.52% in the month of August 2022, from 19.64% recorded in the previous month, representing the highest rate since September 2005 (15-year high). According to the National Bureau of Statistics (NBS), the two components of the CPI also accelerated in the review month.
- Food inflation rose to 23.12% in August 2022, representing a 1.1%-point increase compared to 22.02% recorded in the previous month. On a month-on-month basis, the food inflation rate in July stood at 1.98%, this is 0.07% lower than 2.04% recorded in the previous month.
- Similarly, the “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 17.20% in August 2022 on a year-on-year basis; up by 0.94% when compared to 16.26% recorded in July 2022.
- The rise in the food index was attributed to increases in prices of bread and cereals, Food product, Potatoes, yam and other tubers, fish, meat, oil and fat.
- On the other hand, the highest increases in the non-food items were recorded in prices of Gas, Liquid fuel, Solid fuel, Passenger transport by road, Passenger transport by Air, fuel and lubricants for personal transport equipment, Cleaning, Repair and Hire of clothing.
Imported food inflation rose to 5-year high of 17.94%
Imported food inflation in Nigeria rose to a 5-year high of 17.94% in August 2022, having consistently increased for the past three months. This is according to analysis by Nairalytics, the research arm of Nairametrics from data tracked from the National Bureau of Statistics (NBS).
- The article highlighted the effect of food imports on Nigeria’s food inflation. Notably, In the first half of the year, Nigeria imported agricultural goods worth N907.8 billion against an export value of N343.4 billion, representing an agric trade deficit of N564.4 billion.
- The war between Ukraine and Russia, which broke out in February 2022, caused a significant uptick in the price of food items like wheat. Note that Nigeria is a major importer of durum wheat.
- Nigeria is a huge consumer of wheat products, with its local production only accounting for just 1% of the 5 to 6 million metric tons consumed annually, while we rely on importation to meet local demand.
- The lack of domestic production of major food items or rather the inability to meet local demands has ensured that the global food crisis found its way into the African giant’s economy, with other underlying doldrums further eroding the value of the people’s earnings.
Local currency still on a nosedive – I&E Window/Black market
The exchange rate between the naira and the US dollar closed at N436.25/$1 at the official window on Friday, 16th September 2022 compared to N436.33/$1 recorded as of the close of trading in the previous week.
- A total of $413.81 million was traded at the official market during the week, up from $348.48 million that exchanged hands in the previous week.
- At the black market, naira closed against the US dollar at N705/$1 on Friday. This represents an appreciation from N708/$1 recorded in the previous week. Despite, the positives recorded at the black market, the exchange rate depreciated to N713.49/$1 at the peer-to-peer cryptocurrency market from N706/$1 recorded in the previous week.
- Also, the external reserve dipped to $38.69 billion during the week from $38.92 billion recorded as of the previous week.
Oil producing states in Nigeria received N377.9 billion in H1 2022
The eight oil-producing states in Nigeria received a sum of N377.93 billion as 13% oil derivation fund in the first half of 2022. This is according to data compiled by Nairalytics, the research arm of Nairametrics from reports released by the National Bureau of Statistics (NBS).
- The states are Abia, Akwa Ibom, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers. The amount received in the review period is 46.9% higher than the N257.2 billion shared in the second half of 2021 and 97.4% increase when compared to the corresponding period of 2021 (N191.4 billion).
- The amount shared in the first six months of 2022 is already 84.2% of the total N448.67 billion shared in the whole of 2021.
- A further breakdown of the data showed that Delta State received the largest share during the period, accounting for 30.4% of the total amount shared by the eight states. In terms of year-on-year increase, Edo State recorded the highest increase in their inflows, increasing by 160.5% year-on-year.
Oil production fell to 972,000 barrels/day
Nigeria’s crude oil production dropped to an average of 972,000 barrels per day in the month of August 2022, from 1.08mbd recorded in the previous month, falling behind the likes of Algeria and Angola.
This is according to data released by the Organization of the Petroleum Producing Countries. Also, data based on secondary sources, crude production dropped to 1.1mbpd in the review month from 1.16mbpd recorded in the previous month.
According to the OPEC, total OPEC-13 crude oil production averaged 29.65 mb/d in August 2022, higher by 618 tb/d m-o-m. Crude oil output increased mainly in Libya and Saudi Arabia, while production in Nigeria declined.
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