Nigeria’s inflation rose to 21.47% in November from 21.09% recorded in October, representing the 10th consecutively monthly increase since the start of the year.
This is according to the latest inflation report by the National Bureau of Statistics (NBS) seen by Nairametrics.
A closer look at the report showed that Nigeria’s inflation rate has now risen to its highest level since September 2005 when the rate stood at 24.32%.
According to the NBS, the increase in the year-on-year inflation rate can be attributed to increase in cost of importation due to the persistent currency depreciation and general increase in the cost of production.
Food inflation, a closely watched indices, rose to 24.13% in November 2022 from 23.72% recorded in the previous month. The rise in food inflation was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, food products, fish.
The “All items less farm produce’’ indices or Core inflation, which excludes the prices of volatile agricultural produce, stood at 18.24% in November 2022 on a year-on-year basis.
- This is a 48.52 basis points increase when compared to 17.76% recorded in October 2022.
- The highest increases in the core basket were recorded in prices of Gas, Liquid fuel, Passenger transport by Air, Vehicles spare parts, and Solid fuel.
Urban inflation: On a year-on-year basis, in November 2022, the urban inflation rate was 22.09%, an increase compared to 21.63% recorded in the previous month and 15.92% recorded in the corresponding month of 2021.
- On a month-on-month basis, the urban inflation index increased by 1.5%. This is higher than the 1.33% recorded in the previous month and 1.12% recorded in November 2021.
Rural inflation: The rural inflation rate in November 2022 was 20.88% on a year-on-year basis; compared to 20.57% recorded in October 2022 and 14.89% recorded in November 2021.
- On a month-on-month basis, the rural inflation index increased by 1.3%. This is higher than the 1.16% recorded in the previous month and 1.04% recorded in November 2021.
States inflation: In terms of headline inflation, Ebonyi State recorded the highest rate at 26.11% in November 2022, followed by Kogi and Rivers State with 25.84% and 24.45% respectively.
- On the flip side, Sokoto (19.02%) and Cross river (19.17%) recorded the slowest rise in headline Year-on-Year inflation.
- Kwara State led the list in terms of food inflation in November 2022 with 29.74%, followed by Kogi State with 29.51% and Ebonyi with 28.25%.
- Kaduna (19.30%), Sokoto (19.48%) and Jigawa (20.55%) recorded the slowest rise in year-on-year food inflation.
Why this matter: The inflation rate is an important indicator, which shows the rate at which the prices of goods and services increase in the country at a given point in time. The Nigerian economy has seen its headline inflation rate increase for the 10th consecutive month, further eroding the purchasing power of the citizens.
- The rising cost of goods and services has been attributed to the surge in energy prices, depreciation of the local currency at the black market (depreciated by 24% year-to-date), imported inflation, and increased cash in circulation amongst other socio-economic issues in the domestic market.
- The CBN, using its monetary tools, has adjusted the monetary policy rate multiple times this year to tame the rising inflation rate, which had remained ineffective due to among other factors the volume of the money supply.
- Hence, the Central Bank redesigned the higher denomination naira notes, which are being rolled out from today, 15th December 2022 and has reduced the maximum withdrawal limit from over-the-counter to N100,000 and N500,000 weekly for individuals and organizations respectively.
- In addition, the apex bank ordered banks to load only N200 notes and below in their ATMs from 9th January 2022, all in a bid to reduce the money supply and encourage cashless forms of financial transactions.