The Federal Government of Nigeria and some of its agencies, particularly, Central Bank, (CBN) are being faced with tougher and harder choices on ways to stabilise the economy which took another dip on Wednesday with consumer price index, (CPI) measuring prices of goods, particularly, food items climbing to 17.7 percent in May 2022, the highest in 11 months.
Just few weeks ago, CBN’s Monetary Policy Committee (MPC) had to resort to hawkish stance, raising the anchor monetary policy Rate (MPR) by 150 bps to rein in inflation, after some years of maintaining status quo.
With this development and fragile Gross Domestic Product (GDP), the managers of the economy are bring faced with tougher choices as consumers are becoming restless on the basis of hardship, ocassioned by dwindling fortunes of the Naira exchanging over N600/$ and even then, both currencies are becoming elusive.
Banks on the other hands are operating on edge as customers are exploring other means of investments for safety and returns.
Particularly, food inflation, which comprises more than 50 percent of the inflation rate, also rose to 19.50 percent, highest in eight months compared to 18.37 percent in the previous month.
This rise in the food index was caused by increases in prices of Bread and cereals, Food products, Potatoes, yam, and other tubers, Wine, Fish, Meat, and Oils.
For instance, the bigger size bread that was sold for between N650-N700 few weeks aga now goes for between N900 to N950.
Some Nigerians now buy yams on retail basis of one or two rubbers as against the ‘seed’ that normally comprises of between 15 to 20 rubbers
that could last for some days based on irregular eating by adults and heads of the various families.
Some analysts had predicted that inflation may peak at 28 percent this year before slowing down.
This is even as the street rate, according to analysts is between 60 to 65 percent, making consumers strangulated and impoverished.
The May figure represents the seventh consecutive rise in an economy bedeviled by low productivity, penchant for foreign goods, scarcity of foreign exchange, among others.
According to data from the new Consumer Price Index report for May 2022 by the nation’s statistics Bureau (NBS) on a month-on-month basis, the headline inflation rate increased to 1.78 percent in May 2022, this is also 0.02 percent rate higher than the rate recorded in April 2022 (1.76) percent.
“The percentage change in the average composite CPI for the twelve months period ending May 2022 over the average of the CPI for the previous twelve months period is 16.45 percent, showing a 0.95 percent increase compare to the 15.50 percent recorded in May 2021,” the report stated.
“On a month-on-month basis, the food sub-index increased to 2.01percent in May 2022, up by 0.01 percent from 2.00 percent recorded in April 2022.”
The urban inflation rate increased to 18.24 percent (year-on-year); which is a 0.27 percent decline compared to 18.51 percent recorded in May 2021. On a month-on-month basis, the urban inflation rate rose to 1.81 percent in May 2022, this is a 0.03 percent increase compared to April 2022 (1.78).
The rural inflation rate increased to 17.21 percent in May 2022 (year-on-year) basis; which is a 0.15 percent decline compared to 17.36 recorded in May 2021. On a month-on-month basis, the rural index rose to 1.76 percent in May 2022, up by 0.02 percent from the rate recorded in April 2022 (1.74).
