National Bureau of Statistics has said that “in August 2021, all items inflation on year on year basis was highest in Kogi (23.40), Bauchi (21.56%) and Oyo (20.32%), while Bayelsa (15.04%), River (14.73%) and Kwara (14.64%) recorded the slowest rise in headline Year on Year rise in prices of food items; inflation”. It said that “on month on month basis however, August 2021 all items inflation was highest in CrossRiver (2.65%), Zamfara (2.05%) and Akwa Ibom (2.01%), while Kaduna (0.20%) and River (0.14%) recorded the slowest rise with Ebonyi recording price deflation or negative inflation; general decrease in the prices of goods and services or a negative inflation rate”.
NBS in its new report on inflationary trend in Nigeria said “in August 2021, food inflation on a year on year basis was highest in Kogi (28.76%), Oyo (23.69%) and Gombe (22.37%), while River (17.69%), Edo (17.26%) and Bauchi (17.24%) recorded the slowest rise in year on year food inflation. On month on month basis however, August 2021 food inflation was highest in Ekiti (2.70%), Abuja (2.62%) and Akwa Ibom (2.50%), while Lagos (0.04%) and Edo (0.08%) recorded the slowest rise with Kaduna recording price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate). The consumer price index, (CPI) which measures inflation increased by 17.01 percent (year-on-year) in August 2021. This is 0.37 percent points lower than the rate recorded in July 2021 (17.38) percent.
In a flash note to investors Afrinvest said “The August 2021 Consumer Price Index (CPI) report released by the NBS today revealed that the headline inflation rate moderated by 37bps y/y to 17.0%, marginally beating our projection of 16.9%. The decline in the y/y headline inflation rate was jointly due to a 31bps and 73bps y/y decline in food inflation and core inflation rate to 20.3% and 13.4% respectively, supported largely by a high base-year effect from 2020. On a m/m basis, the headline inflation rate climbed by 10bps to 1.0% from 0.9% in July 2021. Interestingly, while the food inflation rate rose 20bps m/m to 1.1%, the core inflation rate moderated by 53bps to 0.8% in August 2021. In terms of the m/m performance of each component item of the CPI basket, we observed that the imported food index rose the highest, up 5.8 points m/m to 451.9 index points in August 2021. This was closely followed by domestic food index (up 4.8 points to 451.9 points), Housing, Water, Electricity, Gas & Other fuels (up 3.9 points to 314.5 points), and Transport (up 3.7 points to 346.0 points). We attribute the sharp increase in the m/m imported food index to the recent high inflation rate in advanced economies and the pass-through effect of Naira devaluation. We link the sharp increase in the domestic food index to supply shortage from the agrarian communities and high logistic costs. Meanwhile, we attribute the pressure on both Housing, Water, Electricity, Gas & Other fuels, and Transport to the increase in the prices of energy items save for PMS and Electricity that are still subsidised”.
NBS said “increases were recorded in all COICOP divisions that yielded the Headline index. On month-on-month basis, the Headline index increased by 1.02 percent in August 2021, this is 0.09 percent rate higher than the rate recorded in July 2021 (0.93) percent. The percentage change in the average composite CPI for the twelve months period ending August 2021 over the average of the CPI for the previous twelve months period was 16.60 percent, showing 0.30 percent point from 16.30 percent recorded in July 2021. The urban inflation rate increased by 17.59 percent (year-on-year) in August 2021 from 18.01 percent recorded in July 2021, while the rural inflation rate increased by 16.43 percent in August 2021 from 16.75 percent in July 2021. On a month-on-month basis, the urban index rose by 1.06 percent in August 2021, up by 0.08 the rate recorded in July 2021 (0.98), while the rural index also rose by 0.99 percent in August 2021, up by 0.12 the rate that was recorded in July 2021 (0.87) percent.
“The corresponding twelve-month year-on-year average percentage change for the urban index is 17.19 percent in August 2021. This is higher than 16.89 percent reported in July 2021, while the corresponding rural inflation rate in August 2021 is 16.03 percent compared to 15.73 percent recorded in July 2021. The composite food index rose by 20.30 percent in August 2021 compared to 21.03 percent in July 2021. This rise in the food index was caused by increases in prices of Bread and cereals, Milk, cheese and egg, Oils and fats, Potatoes, yam and other tuber, Food product n.e.c, Meat and Coffee, tea and cocoa. On month-on-month basis, the food sub-index increased by 1.06 percent in August 2021, up by 0.20 percent points from 0.86 percent recorded in July 2021. The average annual rate of change of the Food sub-index for the twelve-month period ending August 2021 over the previous twelve-month average was 20.50 per cent, 0.34 per cent points from the average annual rate of change recorded in July 2021 (20.16) per cent.
The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 13.41 percent in August 2021, down by 0.31 percent when compared with 13.72 percent recorded in July 2021. On month-on-month basis, the core sub-index increased by 0.77 percent in August 2021. This was down by 0.54 percent when compared with 1.31 percent recorded in July 2021. The highest increases were recorded in prices of Shoes and other footwear, Household textile, Motor cars, Garments, Game of chance, Major household appliances whether electric or not, Hospital services, catering services, Appliances, articles and product for personal care and Clothing materials, other articles of clothing and clothing accessories. The average 12-month annual rate of change of the index was 12.29 percent for the twelve-month period ending August 2021; this is 0.24 percent points higher than 12.05 percent recorded in July 2021. In analysing price movements under this section, note that the CPI is weighted by consumption expenditure patterns which differ across states. 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”.
