The continued rise in prices of food items in Nigeria has pushed bread, cereal, oil, potatoes, yam, fish fruit and meat out of the reach of the common man thus send more Nigerians into the poverty line in the month of November. According to National Bureau of Statistics “the Food inflation rate in November 2023 was 32.84 per cent on a year-on-year basis, which was 8.72 per cent points higher compared to the rate recorded in November 2022 (24.13%). The rise in Food inflation on a year-on-year basis was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables and coffee, tea and cocoa. On a month-on-month basis, the Food inflation rate in November 2023 was 2.42% this was 0.51% higher compared to the rate recorded in October 2023 (1.91%). Food inflation, which accounts for the bulk of Nigeria’s inflation basket, rose to 32.84% in November from 31.52% a month earlier.
“The rise in Food inflation on a month-on-month basis was caused by rise in the rate of increase in the average prices of Bread and Cereals, Oil and fat, Meat, Coffee, Tea and Cocoa, Potatoes, Yam & Other Tubers. The average annual rate of Food inflation for the twelve-months ending November 2023 over the previous twelve-month average was 27.09%, which was 6.68% points increase from the average annual rate of change recorded in November 2022 (20.41%)” NBS also saidannual rate of inflation in Nigeria inched higher in the month of November 2023 for the 11th straight month to the highest level in 18 years, adding pressure on the central bank to tackle the rise amid a worsening cost-of-living crisis. National Bureau of Statistics said “in November 2023, the headline inflation rate increased to 28.20 per cent relative to October 2023 headline inflation rate which was 27.33 per cent. Looking at the movement, the November 2023 headline inflation rate showed an increase of 0.87% points when compared to October 2023 headline inflation rate. On a year-on-year basis, the headline inflation rate was 6.73% points higher compared to the rate recorded in November 2022, which was 21.47%.
“This shows that the headline inflation rate, year-on-year basis, increased in November 2023 when compared to the same month in the preceding year (i.e., November 2022). Furthermore, on a month-on-month basis, the headline inflation rate in November 2023 was 2.09%, which was 0.35% higher than the rate recorded in October 2023 (1.73%). This means that in November 2023, the rate of increase in the average price level is more than the rate of increase in average price level in October 2023”. The last time Nigerians experienced this level of inflation was in August 2005, official data shows. On Dec. 13, the World Bank warned Nigeria to control inflation, and tasked the central bank to tighten monetary policy, build market confidence around free foreign exchange pricing and phase out so-called “ways and means” advances to the government. Price rises for food and non-alcoholic beverages were the biggest driver of annual inflation in November, the statistics bureau said.
Before now, “all items less farm produces” is referred to as the Core inflation. This was because the prices of items that constitute energy were regulated by the government e.g, Petroleum Motor Spirit (PMS). Due to the deregulation of the sector and the removal of the fuel subsidy, all the items that constitute energy are now determined by market forces and hence their prices are termed volatiles. Therefore, Core inflation is referred to as all items index less farm produces and energy. The “All items less farm produces and energy” or Core inflation, which excludes the prices of volatile agricultural produces and energy stood at 22.38% in November 2023 on a year-on-year basis; up by 4.39% when compared to the 17.99% recorded in November 2022. The highest increases were recorded in prices of Passenger Transport by Road, Medical Services, Passenger Transport by Air, Actual and Imputed Rentals for Housing, Pharmaceutical prod- ucts, Accommodation service etc. On a month-on-month basis, the Core Inflation rate was 1.53% in November 2023. It stood at 1.39% in October 2023, up by 0.14%. The average twelve-month annual inflation rate was 20.35% for the twelve-months ending November 2023; this was 4.66% points higher than the 15.69% recorded in November 2022.
“In analysing price movements under this section, it should be noted that CPI is weighted by consumption expenditure patterns which differ across States and locations. Accordingly, the weight assigned to a particular Food or Non-Food item may differ from State to State making interstate comparisons of consumption basket inadvisable and potentially misleading. In November 2023, All Items inflation rate on a Year-on-Year basis was highest in Kogi (33.28%), Lagos (32.30%), Rivers (32.25%), while Borno (22.47%), Katsina (24.91%) and Plateau (25.53%) recorded the slowest rise in Headline inflation on Year-on-Year basis. On a Month-on-Month basis, however, November 2023 recorded the highest increases in Kano (3.55%), Kebbi (3.34%), Borno (3.24%), while Taraba (0.74%), Anambra (1.00%) and Enugu (1.18%) recorded the slowest rise on Month-on-Month inflation. In November 2023, Food inflation on a Year-on-Year basis was highest in Kogi (41.29%), Kwara (40.72%) and Rivers (40.22%), while Bauchi (26.14%), Borno (27.34%) and Jigawa (27.63%) recorded the slowest rise in Food inflation on Year-on-Year basis. On a Month-on-Month basis, however, November 2023 Food inflation was highest in Cross River (4.37%), Edo (3.95%) and Rivers (3.91%), while Anambra (0.63%), Oyo (0.91%) and Bauchi (1.00%) recorded the slowest rise in inflation on Month-on-Month basis”.
Central Bank Governor Olayemi Cardoso has promised to phase out the bank’s fiscal intervention programs in a bid to tame inflation. Cardoso said the central bank plans to tighten policy over the next two quarters to manage inflation, after restarting its Open Market Operations (OMO) to help rein in money supply. Despite President Bola Tinubu embarking on Nigeria’s boldest reforms in decades, the country has struggled with foreign exchange shortages, low oil revenue and theft of crude oil, its main export and forex earner. Analysts said Naira depreciation, higher fuel and food prices, logistics costs and money supply growth, were some of the major drivers of Nigeria’s inflation. Inflation in Nigeria, Africa’s most populous nation, has risen to double-digits since 2016, eroding incomes and savings, despite the central bank hiking interest rates to their highest level in nearly two decades at its last meeting. The central bank, at its last monetary policy meeting in July, opted for a smaller than expected 25 basis point hike, saying it preferred a moderate increase to anchor inflation expectations while continuing to support investment.
