The National Bureau of Statistics (NBS) has revealed that Nigeria’s annual consumer inflation rate, measured by the Consumer Price Index (CPI) hit a double digit on Tuesday, as food costs raised February’s inflation to 11.4 per cent as against January’s 9.6 per cent, for the first time since December 2012.
Factors cited as fueling the rise in inflation are substantial rise in prices of all foods items and other consumables during the month under review.
The 1.76 per cent rise in the headline index is attributed to the faster pace of increase across almost all major divisions that contribute to the index with the exception of the restaurants and hotels division which also rose, albeit, at a slower pace.
Pegging of the naira at 199/$ by the Central Bank of Nigeria (CBN) last year despite drastic fall in the price of oil at the international markets where Nigeria earns over 80 per cent of her foreign exchange, has failed to stem inflation, which has been above the 6 per cent to 9 per cent target band since last May.
The apex bank also lowered the benchmark interest rate by 2 percentage points to 11 per cent last November to help support an economy hit by plunging oil prices.
According to the NBS, the pace of food price increased as recorded by the food sub-index increased at a faster pace in February, with the food index rising by 11.3 per cent, up by 0.71 per cent from what was recorded in January.
NBS stated that
“During the month (February), all major food groups which contribute to the food sub-index increased at a faster pace during the month with the exception of potatoes, yams and other tubers group and sugar, jam, honey, chocolate and confectionery groups.”
The urban index rose by 12.3 per cent (year-on-year) from 9.7 per cent in January, while the rural index also rose to 10.7 per cent in February from 9.5 per cent the month before.
On a month-on-month basis, both the urban and rural indices increased at a faster pace, as the urban index increased by 3.0 per cent in February from 0.9 per cent in January, while the rural index increased by 1.8 per cent from 0.9 per cent in January.
Also, the core sub-index increased at a faster pace in February, as imported items as well as other domestic shocks resulted in ripple effects across many divisions that contribute to the core index.
The core sub-index rose to 11.0 per cent in February, roughly 2.2 per cent from the rate recorded in the previous month. Imported food items as well as other necessary inputs to producing key local staples, such as bread, continue to drive the food index higher. The food index increased to 11.3 per cent (year- on-year), 0.7 per cent points higher from rates recorded in January.
Fish, vegetables and bread and cereal groups had the highest price increases recorded for the second consecutive month, the NBS reports.
Surprisingly, while prices of all consumables have increased, the energy and power supplies are in their lowest ebb, as the average monthly price paid by Nigerian households for a litre of petrol across the country dropped to N99.76/litre in February compared to N109.59/litre.
The official pump price of petrol remained unchanged at between N86 and N86.50/litre, but figures provided showed that on the monthly average, Nigerians have continued to purchase petrol above the official rate in the period under review.
According to the NBS report for February, Ogun and Edo States recorded the lowest monthly average price of N86.53 and N86.50 respectively for a litre of petrol.
On the other hand, Yobe and Bayelsa States accounted for the highest monthly average price of petrol at N122.88 and N120.06 respectively. Abuja and Lagos recorded monthly averages of N92.70 and N87.03 respectively.
Nigeria’s growth slowed to 2.8 per cent last year, the weakest level since 1999 and down from 6.2 per cent in 2014.
Analysts have blamed capital controls introduced by the CBN last year to prop up the naira, for worsening the slowdown, by deterring foreign investment and making it difficult for businesses to buy imported goods.