Amid Tight Monetary Policy Measures, Nigeria’s Inflation Rises To 21.82% 

Nigeria’s inflation rate resumed its uptrend in January 2023, hitting a record high of 21.82%.

This represents a 0.47% increase when compared to the 21.34% recorded in the previous month.

The development is in line with predictions by some analysts that inflation would continue with the upward trend.

According to Bismarck Rewane, chief executive of Financial Derivatives Company, in the current FDC Economic Bulletin said, “The headline inflation report for January will be published on February 15, 2023, and we are projecting an increase in inflation to 21.42% from 21.34% in December.

We expect core inflation to increase marginally to 18.73% from 18.49% in the previous month.”

The January figures were contained in the report released by the National Bureau of Statistics (NBS) on Wednesday.

The new increase in the country’s inflation comes amid the uncertainties being faced by Nigerians due to the scarcity of the redesigned Naira notes.

Also, the food inflation surged to 24.32% in January from 23.75% recorded in December 2022, while core inflation, which excludes the prices of volatile agricultural produce stood at 19.16% in the review month compared to 18.49%.

Notably, the highest increases were recorded in prices of Gas, Liquid Fuel, Passenger Transport by Air, Vehicles Spare Parts, Fuels, and Lubricants for Personal Transport Equipment, Solid Fuel, etc.

Meanwhile, in terms of the food index, the surge in the rate was attributed to an increase in the prices of some food items like Oil and Fat, Bread and Cereals, Fish, Potatoes, Yam & Tubers, etc.

Urban inflation stood at 22.55%, showing a 6.38% increase year-on-year from January 2022. On a month-on-month basis, the urban inflation rate was 1.98% in January 2023, this was 0.17% points higher compared to December 2022 (1.80%).
Rural inflation, on the other hand, was 21.13%, a 6.08% increase/decrease from the corresponding period in 2022. On a month-on-month basis, the rural inflation rate was 1.77%, up by 0.14% points compared to December 2022 (1.63%).
Food inflation, a compound index which monitors the movement in food prices across the nation, rose to 24.32%.

Compared to the previous month’s figure of 23.75%, the rate saw an increase of 12.30 basis points while when compared year-on-year from January 2022, food inflation increased by 7.19% points.

According to the NBS report, the increase in food inflation was mostly driven by the increase in the prices of Potatoes, Yam, and Tuber (6.06%), Vegetables (5.44%), and Meat (4.78%) amongst other products such as Fish, Fruits, Breads and Cereals.

Over twelve months ending January 2023, the average annual food inflation rate was 21.53%, higher than the previous twelve-month average of 20.94%.

Core inflation, an index which monitors the price movement of all items except farm produce, stood at 19.16%.

This was an increase from the 18.49% rate of December 2022, while when compared year-on-year from January 2022, core inflation rose by 5.29%.

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On a month-by-month basis, the core inflation rate was 1.82%, a 0.49% increase from December 2022’s rate.

Inflation by state: Year-on-year CPI inflation was found to be highest in Bauchi (24.7%), Ondo (24.54%), and Anambra (24.51%), while Jigawa (19.09%), Borno (19.62%), and Sokoto (19.90%) saw the lowest inflation rates across the country.

On a month-to-month basis, Lagos (2.91%), Taraba (2.84%), and Ondo (2.68%) saw the highest rates of increase in headline inflation while Yobe (0.54%), Jigawa (0.73%), and Oyo (0.87%) recorded the lowest.
With respect to food inflation, Kwara (29.03%), (27.67%), and Ondo (27.38%), recorded the highest rates of increase year-on-year, while Jigawa (19.22%), Sokoto (20.80%), and Yobe (21.32%) saw the lowest rates.

On a month-to-month basis, food inflation was highest in Lagos (3.67%), Ogun (3.54%), and Ekiti (3.32%) in January 2023, while Yobe (-0.50%), Jigawa (0.18%), and Kebbi (0.92%) increased at the lowest rates.