UPDATED: Nigeria’s inflation hits 21.91% 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 February.

Inflation rose to 21.91 per cent in February compared to 21.82 per cent in January, the National Bureau of Statistics announced Wednesday.

The statistics office said the February inflation rate showed an increase of 0.09 per cent points when compared to January’s headline inflation rate.

In recent months, Nigerians have 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 daily needs.

Earlier in March, the Supreme Court ruled that the CBN must extend the use of old banknotes until 31 December due to the negative impact of the policy.

A seven-member panel of the court, led by John Okoro, unanimously ordered the CBN to continue receiving the old notes from Nigerian citizens.

The court also found that President Muhammadu Buhari’s directive to the CBN on the withdrawal of old notes and redesign of new banknotes without proper consultation was invalid.

On Monday, hours after the presidency said that Mr Buhari never directed the CBN to disobey the order of the Supreme Court, the CBN directed banks to comply with the apex court’s order and accept the old notes as legal tender until the end of the year.

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.

“Similarly, on a year-on-year basis, the headline inflation rate was 6.21 per cent points higher compared to the rate recorded in February 2022, which was 15.70 per cent.

“This shows that the headline inflation rate (year-on-year basis) increased in February 2023 when compared to the same month in the preceding year (i.e., February 2022),” the NBS 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 other tubers (6.06 per cent), vegetable (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 February 2023 was 1.71 per cent, which was 0.16 per cent points lower than the rate recorded in January 2023 (1.87 per cent).

“This means that in February 2023, on average, the general price level was 0.16 per cent lower relative to January 2023.

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“The percentage change in the average CPI for the twelve months ending February 2023 over the average of the CPI for the previous twelve months period was 19.87 per cent, showing a 3.15 per cent points increase compared to 16.73 per cent recorded in February 2022,” the report said.

Food inflation

The food inflation rate in February was 24.35 per cent on a year-on-year basis, which was 7.24 per cent points higher compared to the rate recorded in February 2022 (17.11 per cent).

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

The report added that all items less farm produce or core inflation, which excludes the prices of volatile agricultural produce, stood at 18.84 per cent in February 2023 on a year-on-year basis, up by 4.83 per cent when compared to the 14.01 per cent recorded in February 2022.

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