The rate at which prices of goods and services rise in the country continued to spiral upwards amidst higher fuel costs and depreciating naira as the headline inflation increased to 27.33 per cent year on year (YoY) in October 2023.
The latest inflation data released by the National Bureau of Statistics (NBS) showed that the October inflation figure was 0.61 per cent higher than the 26.72 per cent that was recorded in September 2023.
Monthly, the headline index fell to 1.91 per cent in October, down by 36 basis points relative to the 2.45 per cent month-on-month ease recorded in September.
According to the NBS, food inflation increased by 31.52 per cent YoY in October 2023 signalling a 0.88 per cent increase over the 30.64 per cent recorded in the previous month.
Commenting on the inflation data, the director of corporate Communications of the Central Bank of Nigeria (CBN), Dr. Isa AbdulMumin expressed optimism that the low rate of increase in the average price level in October compared to September 2023, was a pointer to the fact that the Bank’s monetary policy stance to tighten rates and its money market reforms were yielding the desired effect. Aggressive monetary tightening using various liquidity mechanisms including removing the cap on the Standing Deposit Facility (SDF) and Open Market Operations had raised Open Buy Back (OBB) rates from less than one per cent in August to their expected levels around the monetary policy rate today.
In spite of a 0.61 per cent increase in the headline inflation rate from 26.72 per cent in September 2023 to 27.33 per cent in October 2023, Isa remained upbeat that the CBN was headed in the desired direction in terms of achieving price stability.
According to him, available statistics showed that the first indication of deceleration in prices was recorded in September and further reforms in the money market, which commenced in October, had accelerated easing in prices as indicated by the substantial drop in month-on-month changes recorded in October.
“Moderation in month-on-month changes in prices observed in the headline, food and core components of the consumer basket followed reforms in the money market and relative stability in the FX market, he added.
A key driver of the headline inflation rate in October, food inflation remained on a steady rise, reaching 31.52 per cent in October. This represents a 7.80 per cent points increase compared to 23.72 per cent recorded in October 2022.
According to the latest CPI report by the National Bureau of Statistics, the increase 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 milk, cheese and eggs.
This is as the Food and Agriculture Organisation said that Nigeria has plunged into an unacceptable threshold of food consumption resulting from a significant spike in staple food prices following increases in fuel prices, inflation and high cost of food production.
According to FAO, over 26.5 million including Internally Displaced Persons (IDPs) are expected to plunge into acute food insecurity between June and August 2024.
It stated that going into the lean season (June to August 2024) households may experience slight to moderate deterioration in food consumption which may plunge several states into the crisis phase.
In the month of October, Kogi, Kwara, and Lagos states had the highest food inflation while Borno, Kebbi and Jigawa recorded the slowest rise.
On a Month-on-Month basis, however, October 2023 food inflation was highest in Yobe (5.35 per cent), Sokoto (3.68 per cent) and Jigawa (3.45 per cent), while Edo, Katsina and Rivers recorded the slowest rise in inflation on Month-on-Month basis.
The headline inflation in the period also increased to 27.33 per cent relative to the September 2023 headline inflation rate which was 26.72 per cent.
