Nigerians are in for another challenging year as the cost of goods and services continue on the upward swing. Nigeria’s rate of changes in prices of goods and services called inflation rose by 16.47 per cent (year-on-year) in the month of January 2021. This is 0.71 per cent higher than the rate recorded in December 2020 (15.75%). This is according to the latest Consumer Price Index report by the National Bureau of Statistics NBS. The report said that Nigeria’s headline inflation has risen to its highest in over three years while food inflation rose to its highest since July 2008, when it stood at 20.9 per cent. On a month-on-month basis, the Headline index increased by 1.49 per cent in January 2021. This is 0.12% points lower than the rate recorded in December 2020 (1.61%).
According to NBS the food price change rose sharply to a record high to stand at 20.57 per cent in January 2021 compared to 19.56 per cent recorded in the previous month. On a month-on-month basis, the food sub-index increased by 1.83 per cent in January 2021, down by 0.22 per cent points from 2.05 per cent recorded in December 2020. The rise in the food index was attributed to increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fruits, vegetables, fish, oils and fats.
NBS report said “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 11.85 per cent in January 2021, up by 0.48 per cent when compared with 11.37 per cent recorded in December 2020. On a month-on-month basis, the core sub-index increased by 1.26 per cent in January 2021. This was up by 0.16 per cent when compared with 1.10 per cent recorded in December 2020. The highest increases were recorded in prices of Passenger transport by air, Medical services, Hospital services, Passenger transport by road, Pharmaceutical products, Paramedical services. Others include; Repair of furniture, Vehicle spare parts, Motor cars, Miscellaneous services relating to the dwelling, Maintenance, and repair of personal transport equipment.
Kogi States led the list of states with the highest inflation rate in January 2021 with 21.38 per cent. Closely followed by Oyo State with 20.17 per cent, Bauchi (19.52%), Ebonyi (18.74%), and Benue State (18.33%). On the other hand, Cross River recorded the lowest at 12.22 per cent followed by Abuja (12.94%), Kwara (13.96%), Abia (14.03%), and Enugu (14.26%). In terms of food inflation, Kogi State also recorded the highest at 26.64 per cent, followed by Oyo State (23.69%). Others on include; Rivers (23.49%), Benue (22.97%), and Kwara (22.76%).
Meanwhile, the urban inflation rate rose to 17.03% (year-on-year) in January 2021 from 16.33% recorded in December 2020, while the rural inflation rate stood at 15.92% in January 2021 compared to 15.20% recorded in December 2020. The rise in the consumer price index indicates that consumers spent more in the month of January compared to December, despite the high spending that December is naturally known for. This also implies that Nigeria is yet to recover from the downturn caused by the covid induced lockdown as well as the closure of land borders in 2019.
