Despite the general consensus by analysts including Central Bank of Nigeria governor, Yemi Cardoso that inflation may be heading towards a point of inflection and could begin to taper as early as Q1’24, Nigeria’s headline inflation rate for November increased to an 18-year peak of 28.20% compared to the October 2023 rate which was 27.33%, the National Bureau of Statistics has disclosed.
Cardoso had said recently that Nigeria’s Inflation would fall and that pressures will also reduce on exchange rate In 2024.
Bismarck Rewane, chief executive officer of the Financial Derivatives Company, in a recent Economic Bulletin said, “Whilst headline inflation has maintained its upward trend, the cheery news is that the slope of the curve is flattening out. This coupled with the projected 0.18% decline in month-on-month inflation to 1.54% (20.23% annualized) suggests that inflation may be heading towards a point of inflection and could begin to taper as early as Q1’24.
This will make the 2024 budget inflation goal of 21.4% a more realistic target. Notwithstanding though, Nigerian inflation is still 19% above the upper band of the CBN target (6-9%) and is much higher than the SSA average of 16.8%.
The MPC will meet in January 2024. The consensus opinion is that the CBN will hike its monetary policy rate by at least 100 basis points to 19.75%p.a. The Apex bank had earlier reiterated its determination to focus primarily on the goal of price stability and not be distracted by unorthodox activities.”
However, the NBS in its Consumer Price Index of November 2023 published on Friday said the headline inflation rate showed an increase of 0.87% points when compared to that of October 2023.
“On a year-on-year basis, the headline inflation rate was 6.73% points higher compared to the rate recorded in November 2022, which was 21.47%.
“This shows that the headline inflation rate (year-on-year basis) increased in November 2023 when compared to the same month in the preceding year (i.e., November 2022).
“Furthermore, on a month-on-month basis, the headline inflation rate in November 2023 was 2.09%, which was 0.35% higher than the rate recorded in October 2023 (1.73%).
“This means that in November 2023, the rate of increase in the average price level is more than the rate of increase in the average price level in October 2023,” NBS said.
It added that the food inflation rate in November 2023 was 32.84% on a year-on-year basis, which was 8.72% points higher compared to the rate recorded in November 2022 (24.13%).
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According to the NBS, “the rise in Food inflation on a year-on-year basis was caused by increases in prices of Bread and cereals, Oil and fat, Potatoes, Yam and other Tubers, Fish, Fruit, Meat, Vegetables and Coffee, Tea and Cocoa.
“On a month-on-month basis, the Food inflation rate in November 2023 was 2.42% this was 0.51% higher compared to the rate recorded in October 2023 (1.91%).
“The rise in food inflation on a month-on-month basis was caused by a rise in the rate of increase in the average prices of Bread and Cereals, Oil and fat, Meat, Coffee, Tea and Cocoa, Potatoes, Yam and other Tubers.
“The average annual rate of Food inflation for the twelve-months ending November 2023 over the previous twelve-month average was 27.09%, which was a 6.68% points increase from the average annual rate of change recorded in November 2022 (20.41%).”
