Inflation in Nigeria rose to a 19-month high in December, as prices continued to rise many months after the country closed its borders with its neighbours.
Annual inflation rose to 11.98 per cent in December 2019 from 11.85 per cent in November 2019, the National Bureau of Statistics said on Friday.
Nigeria has seen rising inflation since June 2018. Nigeria closed its borders in September to check smuggling. This has driven prices up.
According to NBS, the composite food index rose by 14.67 per cent in December 2019 compared to 14.48 per cent in November 2019.
“This rise in the food index was caused by increases in prices of Bread and cereals, Meat, Fish, Oils and fats, Potatoes, yam, and other tubers,” it said.
“On month-on-month basis, the food sub-index increased by 0.97 per cent in December 2019, down by 0.28 per cent points from 1.25 per cent recorded in November 2019.”
The average annual rate of change of the Food sub-index for the twelve-month period ending December 2019 over the previous twelve-month average was 13.74 per cent, 0.09 per cent points from the average annual rate of change recorded in November 2019 (13.65) per cent,” it said.
Inflation In States
In December 2019, food inflation on a year on year basis was highest in Sokoto, Ogun, and Plateau, while Bayelsa, Delta, and Bauchi recorded the slowest rise.
However, when compared to the previous month, food inflation was highest in Kogi, Kaduna, and Abia states.
Delta, Edo, Imo, and Kwara states recorded price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate).
The lead economist, SPM professionals, Paul Alaje, said he expected the inflation to be above12.00 per cent.
In a phone interview with PREMIUM TIMES, he attributed the reason to the rush in commodity purchase over the festive period.
“Actually the expected figure is 12.01 not 11.98 percent and the reason is very clear, the figure that was released for the month of December and we know that in December, there are a lot of activities around demands for household good and some other commodities that were demanded which include food, clothing etcetera. Those were major influencers of inflation figures will be at that time,” he said.
He also said that no institution was even expecting a reduction in the inflation rate, “we were all expecting a major rise, a major increase in inflation rate for December 2019”.
Causes for the previous rise
Mr. Alaje said the consistent increase in the past three months may not directly be as a result of the policies made in the previous month, (border closure among other things.)
“Remember that smuggling of rice has led to a bit of decrease in the price of the commodity which had implications for food vendors among other things.
“Things that have been smuggled to Nigeria and by implication at lower prices now have to sell at the local production price which is relatively high of course when compared,” he said.
Even though the index is still within the corridors of 11-12 percent, he, however, cautioned that “we don’t get to the territory of 12-13 percent which of course is not what we desire”.