From Isaac Anumihe, Abuja and Merit Ibe
The National Bureau of Statistics (NBS), says Nigeria’s headline inflation rate rose to 19.64 percent on a year-on-year basis in July.
Semiu Adeniran, the Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics (NBS) said this in the Consumer Price Index (CPI) for July 2022 released by the Bureau in Abuja on Monday.
Giving a breakdown of the report in a statement, Adeniran said that the CPI which measures the average change over time in the prices of goods and services consumed by people for day-to-day living.
According to him, it is a core macroeconomic indicator used in the derivation of the inflation rate for policy, planning, and monitoring of an economy. Adeniran said the report showed that in July 2022, on a year–on–year basis, the headline inflation rate was 19.64 per cent.
“This is 2.27 per cent points higher compared to the rate recorded in July 2021, which was 17.38 per cent. “This shows that the headline inflation rate increased in July 2022 when compared to the same month in the previous year of July 2021. “This means that in July 2022, the general price level was 2.26 per cent higher than in July 2021.’’
He said increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the Headline index.
Adeniran said the increase in inflation was caused by an increase in food index attributed to the disruption in the supply of food products.
The statistician-general also said the increase in inflation was caused by an increase in the cost of transportation arising from the higher cost of energy.
According to him, the increase in the inflation rate was also due to an increase in import costs as a result of currency depreciation, as well as a general increase in the cost of production.
He said on a month-on-month basis, the headline inflation rate in July 2022 was 1.817 per cent, which was higher than the rate recorded in June 2022 at 1.816 per cent.
“The percentage change in the average CPI for the twelve months ending July 2022 over the average of the CPI for the previous twelve months period was 16.75 per cent. “This is showing a 0.46 per cent increase compared to 16.30 per cent recorded in July 2021.’’
Adeniran said the composite food index on a year-on-year basis was 22.02 per cent in July 2022, showing a rise compared to 21.03 per cent in July 2021.
The statistician-general said on a month-on-month basis, the food sub-index in July 2022 was 2.04 per cent lower than the 2.05 per cent recorded in June 2022.
“The index for all items less farm produce (Core inflation), which excludes the prices of volatile agricultural produce stood at 16.26 per cent in July 2022 on a year-on-year basis.
“This was higher when compared to 13.72 per cent recorded in July 2021. On a month-on-month basis, the core sub-index was 1.75 per cent in July 2022 higher when compared to 1.56 per cent recorded in June 2022.
He said the highest increases were recorded in prices of gas, liquid fuel, solid fuel, passenger transport by road, passenger transport by air, garments, cleaning, repair and hire of clothing.
Adeniran said on a year-on-year basis, in July 2022, the urban inflation rate was 20.09 per cent, 2.08 per cent higher compared to 18.01 per cent recorded in July 2021.
He said on a month-on-month basis the urban inflation rate was 1.82 per cent in July 2022, showing a decline compared to June 2022 at 1.82 per cent.
Adeniran said the rural inflation rate in July 2022 was 19.22 per cent on a year-on-year basis, which were 2.47 per cent higher compared to the 16.75 per cent recorded in July 2021.
In their reaction to the spike in inflation, Chairman, Apapa branch of the Manufacturers Association of Nigeria (MAN), Frank Onyebu and Mr Muda Yusuf, founder and CEO of CPPE said the development was not unexpected
“We are not surprised that inflation is rising. Government is not doing anything to reduce it . The cost of food items is even higher.. The economy is really going down by the day. I don’t know how the country is going to escape from this except something happens in 2023. Government is not doing anything to reduce inflation and help the economy. When the economy is not being supported by good government policies, this is exactly what we expect. Production is going down. A The economy is like a house without foundation. So I’m not surprised that inflation is rising.”
Also speaking, Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE) and an economist, Dr Muda Yusuf noted that the heightened inflationary pressures in the Nigerian economy remains very troubling.
The major inflation drivers have not abated, if anything, they have become even more intense. These factors include transportation costs, logistics challenges, exchange rate depreciation, forex liquidity issues, hike in energy prices, climate change, insecurity in many farming communities and structural bottlenecks to production.