*Analysts cite fuel price hike, weaker Naira
*Project higher inflation rate
By Babajide Komolafe, Nkiru Nnorom, Rosemary Iwunze & Elizabeth Adegbesan
Nigeria’s inflation rate rose to 32.7 per cent in September, reversing two months consecutive decline to 32.15% in August, driven by further increase in food prices and transportation cost caused by recent fuel price hikes and weaker Naira.
Reflecting the impact of the two factors, Food inflation rate rose to 37.77 per cent in September, also reversing two consecutive month decline to 37.52 per cent in August.
According to analysts, the renewed upward trend in the inflation rate, will persists as due to continued impact of the fuel price hikes and exchange rate pressure.
Disclosing the renewed surge in the inflation rate in its Consumer Price Index, CPI Report for September, the National Bureau of Statistics, NBS said: “In September 2024, the Headline inflation rate was 32.70% relative to the August 2024 headline inflation rate of 32.15%. Looking at the movement, the September 2024 Headline inflation rate showed an increase of 0.55% compared to the August 2024 Headline inflation rate.
“On a year-on-year basis, the Headline inflation rate was 5.98% points higher compared to the rate recorded in September 2023 (26.72%).
“This shows that the Headline inflation rate (year-on-year basis) increased in September 2024 when compared to the same month in the preceding year (i.e., September 2023).
“Furthermore, on a month-on-month basis, the Headline inflation rate in September 2024 was 2.52%, which was 0.30% higher than the rate recorded in August 2024 (2.22%).
“This means that in September 2024, the rate of increase in the average price level is higher than the rate of increase in the average price level in August 2024.”
Food inflation
The NBS further said: “The Food inflation rate in September 2024 was 37.77% on a year-on-year basis, 7.13% points higher than the rate recorded in September 2023 (30.64%).
“ The rise in Food inflation on a year-on-year basis was caused by increases in prices of the following items: Guinea Corn, Rice, Maize Grains, Beans, etc (Bread and Cereals Class), Yam, Water Yam, Cassava Tuber, etc (Potatoes, Yam & Other Tubers Class), Beer (Local and Foreign) (Tobacco Class), Lipton, Milo, Bournvita, etc (Coffee, Tea & Cocoa Class) and Vegetable Oil, Palm Oil, etc (Oil & Fats Class).
“On a month-on-month basis, the Food inflation rate in September 2024 was 2.64% which shows a 0.27% increase compared to the rate recorded in August 2024 (2.37%).
Analysts Comment
Dr. Ayodeji Ebo, MD/Chief Business Officer, Optimus by Afrinvest, asserted that the uptrend would likely be sustained into the future given the recent increase in petrol pump price and its attendant impact on food prices.
He said: “The rise in headline inflation can be attributed to the sharp increase in food prices. The increase in food prices can be linked to the ongoing insecurity in the food producing areas as well as the impact of the flood.
“The increase in transportation costs due to higher fuel prices will also impact food prices. The recent rise in fuel prices will have a greater impact in October; hence, the uptrend may be sustained.”
Commenting, Ifeanyi Ubah Head, Investment Research, Comercio Partners Limited, said: “We anticipate a rise in food inflation in the coming months due to the impact of increased fuel prices, which are raising transportation costs for goods. The ongoing fluctuations in the exchange rate further compound this issue, as they affect the prices of imported food items. Additionally, the implementation of the food waiver policy has not yet occurred, leaving a gap in immediate relief measures to alleviate inflationary pressures. Even with the policy in place, the persistent volatility in the exchange rate is expected to continue influencing food prices, suggesting a challenging outlook for consumers and the overall economy.”
Impact on Nigerians
Speaking on the rise in inflation rate, Executive Secretary of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Tope Adaramola said: “It will over hit the ordinary man who has very limited economic scope and it will further impoverish the already impoverished Nigerians because fixed recipients suffer more during inflation. Fixed recipients are people whose salaries are fixed, they will suffer. And when you look at the employment profile in this country, this people constitute a significant chunk of the employment market. The worst hit will be pensioners because there will be a serious diminution in their disposable income.”
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