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Nigeria’s Inflation Rate is Up 12.2% as The Food Index Increases

Data from the National Statistics Bureau (NBS) shows that the Nigeria inflation rate has risen by 12.20% compared to February 2020. This is 0.07% above the 12.13% rate recorded in January 2020 and the highest increase since April 2018.

The NBS data revealed that the food index rose from 14.85% recorded in January to 14.9% in February 2020 while core inflation increased by 0.08% to stand at 9.43% compared to 9.35% recorded in the preceding month.

An increase was recorded in all subsets of the consumer price indexes as Urban and rural inflation rate increased year-on-year by 12.85% and 11.61% in February from 12.78% and 11.54% recorded in January, respectively.

Rise in Food Prices

The composite food index rose by 14.9% in the month under consideration compared to 14.85% recorded in January. The rise is attributed to an increase in prices of major household commodities such as; Bread and Cereals, Fish, Meat, Vegetables and Fats & Oils.However, one month-on-month basis, the food sub-index declined by 0.12% points compared 0.99% recorded in January to stand at 0.87%.

The Core Inflation

The Core inflation which excludes the prices of volatile agricultural produce increased by 9.43% in February 2020. A figure that is 0.08% higher when compared to 9.35% recorded in the previous month.

The Key Drivers of the Inflation

The highest increases were recorded in prices of Pharmaceutical products, Catering services, Air transport, Furniture repair, Repair and maintenance of personal transport equipment, Water supply, Major household appliances, Dental services, carpet and other floor coverings, Vehicle spare parts and Non-durable household goods.

Nigeria States that Suffer the Most

Food inflation was highest in Sokoto State with 17.12% (year-on-year), followed by Plateau State (16.99%), Gombe State (16.96%), Edo State (16.71%) and Kano State with food index of 16.45%.

Bauchi State also recorded the worst hit in terms of all items inflation with 14.47% rate followed by Niger State, which recorded 14.06% inflation rate. Other states include Plateau (13.98%), Sokoto (13.96%) and Kano (13.86%).

Bayelsa, Katsina, Bauchi states led the list of states with lowest food inflation rate with 11.89%, 13.04% and 13.04% respectively while Nasarawa and Ondo States followed with 13.5% and 13.53%.

What the Inflation Means for Nigerians

The latest rate of Nigeria inflation will weaken the purchasing power of Nigerians, thus limiting the quantity of quality goods and services they can afford.

With COVID-19 alarming investors and reducing oil prices globally, inflation is projected to continue to grow above 12.3% . As stated by Bismarck Rewane, the introduction of the new VAT rate of 7.5% in February 2020 led to the upward trend of the inflation rate, and so would the rise in electricity tariffs in April.

READ ALSO: Nigeria’s inflation rate drops to 11.08% in July 2019

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