15th August, 2022
Annual inflation rate in Nigeria continued its upward trend in July 2022, settling at a historic high of 19.64%, according to data from the National Bureau of Statistics (NBS).
In June, the inflation was estimated at 18.60%.
In comparative analysis, inflation rate in Nigeria is still far below what trends in West Africa, notably Ghana.
In July 2022, Ghana’s inflation rate increased from 29.8% to 31.7%. This was the quickest pace seen since November 2003 and the eleventh consecutive month that the rate has exceeded the upper limit of the target range set by the central bank, which is between 6% and 10%
In Ivory Coast, the inflation rate garnered an increase of 2.2% in June and now stands at 27.2%
The surge in prices in Nigeria was visible both in the food and core basket.
On a YoY basis, food prices increased by 22.02%, the highest in the last 14 months.
Similarly, prices in the core basket rose on an annual basis by 16.26%, 51bps faster than the prior month.
Overall, the accelerated price increases in July reflects the lack of adequate investment in the agricultural sector, insecurity in food producing states, high transportation, the negative impact of geopolitical tensions as well as weak Naira.
Further amplifying the surge in the annual inflation rate in July 2022 is the unfavourable low base impact.
On a MoM basis, inflation rate was flat at 1.82% as slightly slower price increases in the food basket (-1bp to 2.04%) more than offset the faster MoM price increases in the non-food basket (+20bps to 1.75%).
Prices in the food and core basket continues to increase at an unhealthy pace, higher than the monthly averages for the year. In the core basket, the upward price pressure was mostly noticeable on Transport (+1.63%), Clothing and Footwear (+1.56%), Health (+1.43%) and HWEGF (+1.42%).
Statistician general explains the figures:
Prince Semiu Adeniran, the Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics (NBS) explained the Consumer Price Index (CPI) for July 2022 released by the bureau in Abuja on Monday.
Giving a breakdown of the report in a statement, Adeniran said that the CPI measures the average change over time in the prices of goods and services consumed by people for day-to-day living.
According to him, it is a core macroeconomic indicator used in the derivation of the inflation rate for policy, planning, and monitoring of an economy.
Adeniran said the report showed that in July 2022, on a year–on–year basis, the headline inflation rate was 19.64 per cent.
“This is 2.27 per cent points higher compared to the rate recorded in July 2021, which was 17.38 per cent.
“This shows that the headline inflation rate increased in July 2022 when compared to the same month in the previous year of July 2021.
“This means that in July 2022, the general price level was 2.26 per cent higher than in July 2021.’’
He said increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the Headline index.
Adeniran said the increase in inflation was caused by an increase in food index attributed to the disruption in the supply of food products.
The statistician-general also said the increase in inflation was caused by an increase in the cost of transportation arising from the higher cost of energy.
According to him, the increase in the inflation rate was also due to an increase in import costs as a result of currency depreciation, as well as a general increase in the cost of production.
He said on a month-on-month basis, the headline inflation rate in July 2022 was 1.817 per cent, which was higher than the rate recorded in June 2022 at 1.816 per cent.
“The percentage change in the average CPI for the twelve months ending July 2022 over the average of the CPI for the previous twelve months period was 16.75 per cent.
“This is showing a 0.46 per cent increase compared to 16.30 per cent recorded in July 2021.’’
Adeniran said the composite food index on a year-on-year basis was 22.02 per cent in July 2022, showing a rise compared to 21.03 per cent in July 2021.
He said the rise in the food index was caused by increases in prices of Bread and cereals, Food products, potatoes, yam, and other tubers, meat, fish, oil, and fat.
The statistician-general said on a month-on-month basis, the food sub-index in July 2022 was 2.04 per cent lower than the 2.05 per cent recorded in June 2022.
“The index for all items less farm produce (Core inflation), which excludes the prices of volatile agricultural produce stood at 16.26 per cent in July 2022 on a year-on-year basis.
“This was higher when compared to 13.72 per cent recorded in July 2021. On a month-on-month basis, the core sub-index was 1.75 per cent in July 2022 higher when compared to 1.56 per cent recorded in June 2022.
He said the highest increases were recorded in prices of gas, liquid fuel, solid fuel, passenger transport by road, passenger transport by air, garments, cleaning, repair and hire of clothing.
Adeniran said on a year-on-year basis, in July 2022, the urban inflation rate was 20.09 per cent, 2.08 per cent higher compared to 18.01 per cent recorded in July 2021.
He said on a month-on-month basis the urban inflation rate was 1.82 per cent in July 2022, showing a decline compared to June 2022 at 1.82 per cent.
Adeniran said the rural inflation rate in July 2022 was 19.22 per cent on a year-on-year basis, which were 2.47 per cent higher compared to the 16.75 per cent recorded in July 2021.
“On a month-on-month basis, the rural inflation rate in July 2022 was 1.811 per cent, which was higher compared to June 2022 at 1.809 per cent.’’
Adeniran said all Items Inflation for the states in July 2022 on a year-on-year basis was highest in Akwa Ibom with 22.88 per cent, followed by Ebonyi with 22.51 per cent, and Kogi with 22.08 per cent.
The statistician-general said the slowest rise was recorded in Jigawa with 16.62 per cent, followed by Kaduna State with 17.04 per cent and Borno with 18.04 per cent.
Adeniran said on a month-on-month basis, July 2022 recorded the highest increase in Adamawa with 2.87 per cent, followed by Abuja with 2.84 per cent, and Oyo State with 2.77 per cent.
“While Bauchi recorded the slowest rise on month-on-month inflation with 0.82 per cent, followed by Kano State with 0.83 per cent and Niger State with 1.03 per cent.’’
He said Food Sub-index Inflation for the states in July 2022 on a year-on-year basis was highest in Kwara with 29.28 per cent, followed by Akwa Ibom with 27.22 per cent, and Kogi with 26.08 per cent.
The statistician-general said Kaduna State recorded the slowest rise in food inflation year-on-year with 17.16 per cent, followed by Jigawa with 17.46 per cent and Anambra with 19.25 per cent.
Adeniran said on a month-on-month basis, the food inflation sub-index was highest in Kwara with 3.90 per cent, followed by Delta with 3.61 per cent, and Benue with 2.94 per cent.
While he said Taraba, Gombe, and Niger recorded the slowest rise on a month-on-month inflation with 0.14 per cent, 0.94 per cent, and 1.13 per cent respectively.