Harder Times For Nigerians As Inflation Hits 30-Month High Of 13.71%

Some analysts say unless the CBN wades in with effective policy measures, the rising prices in food stuffs will continue as Nigeria approaches festive period.

CBN unexpectedly cut its key interest rate by 100 basis points in September even as price growth has been above the 9% top of the target range since 2015, saying that traditional tools of monetary policy may not be helpful in addressing current inflationary pressures.

The analysts, who believe the apex bank may have reached limits of policy options, will have to think outside the box to save the country of these economic hardships.

On a month-on-month basis, the food sub-index increased by 1.88 per cent in September 2020, up by 0.21 per cent points from 1.67 per cent recorded in August.
The average annual rate of change of the food sub-index for the 12-month period ending September 2020 over the previous 12-month average was 15.13 per cent, 0.26 per cent points from the average annual rate 14.87 per cent in August.
Core inflation which measures all items less farm produce and excludes the prices of volatile agricultural produce stood at 10.58 per cent in September 2020 from 10.52 per cent in the preceding month.

According to the report, increases were recorded in all Classification of Individual Consumption According to Purpose (COICOP) divisions that yielded the Headline index.
On a month-on-month basis, the headline index increased by 1.48 per cent in September 2020. This is 0.14 per cent rate higher than the rate recorded in August 2020, which stood at 1.34 per cent.
The percentage change in the average composite CPI for the twelve months period ending September 2020 over the average of the CPI for the previous 12 months period was 12.44 per cent, showing 0.21 per cent point from 12.23 per cent recorded in August 2020.
The urban inflation rate increased by 14.31 per cent (year-on-year) in September 2020 from 13.83 per cent recorded in August 2020, while the rural inflation rate increased by 13.14 per cent in September 2020 from 12.65 per cent in August 2020.

On a month-on-month basis, the urban index rose by 1.56 per cent in September 2020, up by 0.14 from 1.42 per cent recorded in August 2020, while the rural index also rose by 1.4 per cent in September 2020, up by 0.13 from 1.27 per cent recorded in August 2020.
The corresponding 12-month year-on-year average percentage change for the urban index is 13.07 per cent in September 2020. This is higher than 12.85 per cent reported in August 2020, while the corresponding rural inflation rate in September 2020 is 11.86 per cent compared to 11.66 per cent recorded in August 2020.

The highest increases were recorded in prices of Passenger transport by air, Medical services, Hospital services, Pharmaceutical products, Passenger transport by road, Motor cars, Vehicle spare parts, maintenance and repair of personal transport equipment, Repair of furniture and Paramedical services.