Nigeria’s inflation rises to 8 per cent amid falling oil prices, devaluation pressures

Nigeria’s Consumer Price Index, CPI, which measures inflation level in the economy at a particular time, moved slightly higher to eight per cent in December 2014, the National Bureau of Statistics, NBS, said on Tuesday.

The Bureau in its report published on Tuesday said the index worsened marginally, increasing by 0.1 percentage points from 7.9 per cent recorded in November 2014. It represented the Rural All items Index, the report said
The worsening inflation situation, analysts say, is a direct fallout from a combination of the pressures by the continued free fall of global crude oil prices at the international market and the recent devaluation of the national currency, the Naira, by the Central Bank of Nigeria, CBN from N155 to the dollar to N168.

The CBN, during its Monetary Policy Committee, MPC, in 2014,said oil exporting countries, including Nigeria, risk inflation and other vulnerabilities in the face of falling oil prices, which declined further from $43.55 per barrel on Monday to $41.50 on Tuesday.

Although the new index managed to hold within the single digit range for the last 24 months, the NBS said the headline index level in December 2014 was affected by the faster pace of price increases as a result of advances in a broad array of divisions.

The Statistician-General of the Federation, Yemi Kale, said despite the global headwinds, the country’s economy continued to remain strong, with inflation declining steadily from 8.3 per cent in September to 8.1 per cent in October and 7.9 per cent in November 2014.

Food prices in December, as a sub-index of the report, Mr. Kale noted, edged slightly higher by 9.2 per cent (year-on-year) from 9.1 per cent in November as a result of the festive period.

The NBS said Headline index rose by 0.82 per cent (month-on-month) in December, higher from 0.59 percent recorded in November.

On year-on-year basis, the NBS said the urban index increased in November by 7.9 per cent, while rural prices as observed by the rural index increased at a faster pace in December after increasing at a slower pace for the previous three months.

On a month-on-month basis, both the Urban and Rural indices recorded the highest increases since May and September 2014 respectively, with prices increasing by 0.2 per centage points to 0.83 and 0.82 per cent respectively.
The percentage change in the average composite CPI for the 12-month period ending in December over the average of the CPI for the previous 12-month period, the bureau, was 8 per cent.