Hardship, as inflation rate hits 20.5%, highest since 2005

Nigerians are gasping for breath as the inflation rate rose by 0.92 basis points to 20.52 per cent in August from 19.6 per cent in July, the highest since October 2005.
This represents the seventh consecutive monthly rise in Headline inflation since February. Food inflation also rose to 23.12 per cent in August 2022, representing a 1.1 percentage-point increase compared to 22.02 per cent recorded in the previous month.
In its Consumers Price Index, CPI, report for August, the National Bureau of Statistics (NBS) said the “increases were recorded in all divisions that yielded the headline index.”
The Bureau stated: “In August 2022, on a year-on-year basis, the headline inflation rate was 20.52 per cent. This was 3.52 percentage points higher compared to the rate recorded in August 2021, which was 17.01 per cent.
“This shows that the headline inflation rate increased in the month of August 2022 when compared to the same month in the preceding year (August 2021). On a month-on-month basis, the Headline inflation rate in August 2022 was 1.77 per cent, this was 0.05 per cent lower than the rate recorded in July 2022 (1.82 per cent).”
On food inflation, NBS further reported: “The food inflation rate in August 2022 was 23.12 percent on a year-on-year basis; which was 2.82 percent higher compared to the rate recorded in August 2021 (20.3 percent).
“This rise in food inflation was caused by increases in prices of bread and cereals, food products, potatoes, yam, and another tuber, fish, meat, oil, and fat. On a month-on-month basis, the food inflation rate in August was 1.98 percent, this was a 0.07 percent decline compared to the rate recorded in July 2022 (2.04 percent). This decline is attributed to a reduction in prices of some food items like yam tubers, garri, local rice, and vegetables.”
In addition to the reasons advanced by NBS, several experts who spoke to Vanguard listed other inflationary pressure points, while recommending some solutions.
Monetary policy not enough — Uwaleke
Professor of Capital Market at Nasarawa State University, Keffi, Uche Uwaleke, reacting to the rise in inflation by 20.52% the highest in two decades, said: “The increase in headline inflation above the psychological threshold of 20% did not come as a surprise in view of the rising inflation trend in many economies, partly caused by the Russian-Ukrainian conflict.
“It’s interesting to note that the NBS, in its latest CPI report, provided a clue as to the major factors driving the inflationary pressure in Nigeria, namely supply disruptions and rising cost of production.  In the light of this revelation, what becomes clear is that the recent monetary policy tightening stance of the CBN alone may not address the challenge. The government needs to formulate and implement complementary fiscal policies aimed at boosting food supply as well as reducing firm’s cost of production.”
Rise in MPR a major concern — Kurfi
In his reaction, analyst and Chief Executive Officer, APT Securities & Funds Limited, Mallam Garba Kurfi, said: “I am not surprised with the outcome but I hope it will not further go up as harvesting of our agricultural products will likely push the food cost down. Equally the price of other foods, especially, wheat is globally coming down.  We are expecting inflation to fall before the end of the year. But of more concern is the increase of the Monetary Policy Rate, MPR, in the last two consecutive sittings of the Monetary Policy Committee, MPC. We hope the monetary authorities will keep the rate the same for the rest of the year.”
Show More

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button