Nigeria’s inflation rate accelerated to a new 17-year high of 21.09% in October 2022, marking a 0.32% points increase from 20.77% recorded in September.
This is according to the Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS).
Food inflation also surged to 23.72% in the review month from 23.34% in the previous month, while the core inflation rate rose to 17.76% from 17.6%.
On a month-on-month basis, the headline inflation rate moderated to 1.24% compared to 1.36% recorded in the previous month, but higher than the 0.98% recorded in the corresponding period of 2021. The increase in the composite index was due to increases in the core and food inflation rate in the period under review.
Possible factors: According to the NBS, the possible factors responsible for the increase in the year-on-year index include disruption in the supply of food products, increase in the cost of importation due to the persistent currency depreciation, and the general increase in the cost of production e.g increase in energy cost.
Food inflation: The food index, which is a closely watched indicator rose by 23.72% in October 2022. This is 0.38% higher than the 23.34% rate recorded in the previous month and 5.38% higher compared to the 18.34% recorded in October 2021.
- The rise in the food inflation rate was caused by increases in prices of Bread and cereals, Food products, Potatoes, yams and other tubers, and oil and fat.
- On a month-on-month basis, the food inflation rate in October was 1.23%, this was a 0.21% decline compared to the rate recorded in September 2022 (1.43%).
- The average annual rate of food inflation for the twelve months ending October 2022 stood at 19.83%, which is 0.92% points lower compared to the average annual rate of change recorded in October 2021 (20.75%).
Core inflation: The core inflation, which excludes the prices of volatile agricultural produce rose to 17.76% in the review month, a 0.16% point increase from 17.6% recorded in the previous month.
- On a month-on-month basis, the core inflation rate was 0.93% in October 2022. It was 1.59 % in September 2022. The highest increases in the core basket were recorded in prices of Gas, Liquid fuel, Passenger transport by Air, Solid fuel, and vehicles spare parts.
- The average 12-month annual inflation rate was 15.31% for the twelve months ending October 2022; this was 2.59% points higher than the 12.73% recorded in October 2021.
What this means: Nigerians have been grappling with high costs of goods and services largely as a result of the surge in energy prices and persistent exchange rate devaluation in the country. Nigeria’s inflation rate hit a new record high, touching a 17-year ceiling of 21.09% indicative of a further decline in the purchasing power of average Nigerians.
The Central Bank has raised interest the rate by a cumulative 450 basis points so far this year in a bid to tame the rising cost of items, while also developing policies to mop up liquidity from the economy, However, the inflation rate has remained stubbornly high and is expected to increase further in the later part of the year due to high demands during festivities.
