Nigeria’s inflation rate up 8 per cent in December 2013

The rise was as a result of non-food commodities.

Nigeria’s Composite Price Index, CPI, which measures the rate of inflation in the economy, rose marginally by 0.1 per cent in December 2013 to about 8 per cent, from 7.9 per cent rate recorded previously in November.

The National Bureau of Statistics, NBS, said in its report, signed by the Statistician General of the Federation, Yemi Kale, that the marginal rise in the rate was mainly as a result of the increase in the prices of seven of the non-food commodities classification, especially alcoholic beverages and transportation costs.

Increase in the prices of gas and other fuels, electricity, tobacco, kola and housing water also contributed to the slight rise in headline inflation.

The percentage change in the average composite CPI for the 12-month period which ended December 2013 over the average of the CPI for the previous 12-month period was 8.5 per cent. This was about 0.3 percentage points lower than the average 12-month rate of change of 8.8 per cent recorded in November.

This showed that the decline of the index was maintained throughout 2013.

The corresponding 12-month year-on-year average percentage change for the urban index was 8.8 per cent, while the corresponding rural index was about 8.4 per cent.

A further analysis of the report showed that the food sub-index grew at the same rate in December as was the case in November, about 9.3 per cent.

The report cited the increase in prices on some major food classes, such as bread and cereals, meat, fish and dairy classes.

There was however less price increases for potatoes, yams and other tubers, fruit, vegetables, sugar, jam, honey, chocolate and confectionery classes, yielding the unchanged year-on-year rate.

On a month-on-month basis, the headline index increased at a faster pace, up by 0.78 per cent in December, from 0.72 per cent recorded in November. This was the highest month-on-month rate change throughout 2013.

The NBS stated further that the urban composite CPI stood at 151.4 points in December, indicating a year-on-year increase of 8.1 per cent. This was unchanged from rates recorded in November; while the corresponding rural national CPI was a 7.9 per cent year-on-year change in December; the first rise recorded in five months.

On a month-on-month basis, the urban all-items index rose by 0.8 per cent in November, the same rate over the last four month; while the rural all-items index was about 0.76 per cent, up from 0.68 recorded in November.

Analysts have predicted a trend of surging inflation rate this year following the higher share of recurrent expenditure profile in the draft 2014 Appropriation Bill as well as the certainty of increased electioneering spending preparatory to the 2015 elections.

This may, however, not begin to reflect until about the end of the first quarter during which this year’s Appropriation Bill would have been enacted into law by the National Assembly and implementation of government programmes would take off.