UPDATED: Nigeria’s inflation hits 22.41% as food prices rise

Nigeria’s annual inflation rate rose to 22.41 per cent in May from 22.22 per cent in the previous month, the National Bureau of Statistics (NBS) said Thursday.

The statistics office said the May 2023 inflation rate showed an increase of 0.19 per cent points when compared to April 2023 headline inflation rate.

The NBS said on a year-on-year basis, the headline inflation rate was 4.70 per cent points higher compared to the rate recorded in May 2022, which was (17.71 per cent).

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

According to the report, the food inflation rate quickened to 24.82 per cent in May from 24.61 per cent in April.

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President Bola Tinubu had, in his inaugural address on 29 May, announced the removal of fuel subsidy.

Following the announcement, the Nigerian National Petroleum Company Limited (NNPCL) directed its outlets nationwide to sell fuel between N480 and N570 per litre, an almost 200 per cent increase from the initial price below N200.

The hike immediately triggered an increase in transportation fares and prices of goods and services by various percentages.

Inflation has remained high in Africa’s largest economy, prompting the apex bank to hike interest rates to their highest levels in nearly two decades.

In an aggressive push to contain the nation’s inflationary pressure, the Central Bank of Nigeria, in May, raised its benchmark lending rate to 18.5 per cent.

In its inflation report Thursday, the NBS said the contributions of items on the divisional level to the acceleration in the headline index are food & non-alcoholic beverages (11.61 per cent), housing, water, electricity, gas and other fuel (3.75 per cent), clothing & footwear (1.71 per cent), transport (1.46 per cent), among others.

On a month-on-month basis, the report said the headline inflation rate in May 2023 was 1.94 per cent, which was 0.03 per cent higher than the rate recorded in April 2023 (1.91 per cent).

“This means that in May 2023, on average, the general price level was 0.03 per cent higher relative to April 2023.

“The percentage change in the average CPI for the twelve months ending May 2023 over the average of the CPI for the previous twelve months period was 21.20 per cent, showing a 4.75 per cent increase compared to 16.45 per cent recorded in May 2022,” the report said.

Food Inflation

The Food inflation rate in May 2023 was 24.82 per cent on a year-on-year basis, which was 5.33 per cent points higher compared to the rate recorded in May 2022 (19.50 per cent).

The NBS said food Inflation was 24.82 per cent in May, up from 24.61 per cent in April.

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

“On a month-on-month basis, the Food inflation rate in May 2023 was 2.19 per cent, this was 0.06 per cent higher compared to the rate recorded in April 2023 (2.13 per cent).

“The average annual rate of Food inflation for the twelve months ending May 2023 over the previous twelve-month average was 23.65 per cent, which was a 4.97 per cent points increase from the average annual rate of change recorded in May 2022 (18.68 per cent),” it said.

The report added that the core inflation, which excludes the prices of volatile agricultural produce stood at 20.06 per cent in May 2023 on a year-on-year basis; up by 5.16 per cent when compared to the 14.90 per cent recorded in May 2022.

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

“On a month-on-month basis, the Core inflation rate was 1.81 per cent in May 2023. It stood at 1.46 per cent in April 2023, up by 0.35 per cent.

“The average twelve-month annual inflation rate was 18.33 per cent for the twelve-months ending May 2023; this was 4.50 per cent points higher than the 13.83 per cent recorded in May 2022,” it said.