UPDATED: Nigeria’s inflation hits 21.82% amid cash crunch

Amid the uncertainties being faced by Nigerians due to the scarcity of the redesigned Naira notes, the nation’s inflation rate rose in January after recording a fall in December.

Inflation rose to 21.82 per cent in January compared to 21.34 per cent in December, the National Bureau of Statistics announced Wednesday.

The statistics office said the headline inflation rate rose to 21.82 per cent compared to December 2022 headline inflation rate which was 21.34 per cent.

The January 2023 inflation rate showed an increase of 0.47 per cent points when compared to December 2022 inflation rate, it said.

Nigerians have in recent weeks faced an unprecedented cash crunch as a result of the naira redesign policy of the Central Bank of Nigeria (CBN).

The crisis has plunged many citizens into hardship, with numerous others finding it extremely difficult to meet their basic daily needs.

The Nigerian Governors’ Forum last week warned that the policy may drive the nation’s economy into a recession.

In its inflation report Wednesday, the NBS said that increases were recorded in all Individual Consumption by Purpose (COICOP) divisions that yielded the headline index.

“However, on a year-on-year basis, the headline inflation rate was 6.22 per cent points higher compared to the rate recorded in January 2022, which was 15.60 per cent.

“This shows that the headline inflation rate (year-on-year basis) increased in January 2023 when compared to the same month in the preceding year (i.e., January 2022),” it said.

The report noted that the contributions of items on a class basis to the increase in the headline index are bread and cereal (21.67 per cent), actual and imputed rent (7.74 per cent), potatoes, yam and tuber (6.06 per cent), vegetables (5.44 per cent), and meat (4.78 per cent).

“On a month-on-month basis, the percentage change in the All-Items Index in January 2023 was 1.87 per cent, which was 0.15 per cent points higher than the rate recorded in December 2022 (1.71 per cent).

“This means that in January 2023, on average, the general price level was 0.15 per cent higher relative to December 2022.

“The percentage change in the average CPI for the twelve months period ending January 2023 over the average of the CPI for the previous twelve months period was 19.36 per cent, showing a 2.49 per cent increase compared to 16.87 per cent recorded in January 2022,” the report said.

Food Inflation

The food inflation rate in January 2023 was 24.32 per cent on a year-on-year basis, 7.19 per cent points higher compared to the rate recorded in January 2022 (17.13 per cent).

The bureau said the rise in food inflation was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, vegetables, fruits, and meat.

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The report added that all items less farm produce or core inflation, which excludes the prices of volatile agricultural produce, stood at 19.16 per cent in January 2023 on a year-on-year basis, up by 5.29 per cent when compared to the 13.87 per cent recorded in January 2022.

The report said the highest increases were recorded in prices of gas, liquid fuel, passenger transport by air, vehicle spare parts, fuels, and lubricants for personal transport equipment, solid fuel, etc.

Last month, the NBS reported that the headline inflation rate slowed for the first time in 11 months in December 2022.

According to data released by the National Bureau of Statistics (NBS), the inflation rate eased to 21.34 per cent from 21.47 per cent in the previous month.