Inflation pressure heightens Nigerians’ cost of living

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  • Rate rises in 10th month to 27.33%
  • We’re working to halt continued inflation rise – CBN
  • NGX rebounds with N113.07bn gain for investors
  • Labour suspends nationwide strike

BY TIMOTHY AGBOR AND FESTUS OKOROMADU

The National Bureau of Statistics said on Wednesday that in the month of October 2023, headline inflation rate increased to 27.33% relative to the September 2023 headline inflation rate which was 26.72%.

Looking at the movement, the October 2023 headline inflation rate showed an increase of 0.61% points when compared to the September 2023 headline inflation rate.

Furthermore, on a year-on-year basis, the headline inflation rate was 6.24% points higher compared to the rate recorded in October 2022, which was (21.09%).

This indicated that the headline inflation rate (year-on-year basis) increased in October 2023 when compared to the same month in the preceding year (i.e., October 2022).

Inflation in the country rose for the tenth month in a row in October, increasing pressure on the new Central Bank Governor to raise interest rates when the monetary policy committee meets for the first time since his appointment.

The NBS inflation report for the month of October said “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 Milk, Cheese and Eggs.

“On a month-on-month basis, the Food inflation rate in October 2023 was 1.91% this was 0.54% lower compared to the rate recorded in September 2023 (2.45%). The decline in Food inflation on a month-over-month basis was caused by the decline in the rate of increase in the average prices of Fruits, Oil and fat, Coffee, Tea and Cocoa, Bread and Cereals.

“The average annual rate of Food inflation for the twelve months ending October 2023 over the previous twelve-month average was 26.33%, which was a 6.50% point increase from the average annual rate of change recorded in October 2022 (19.83%).

“Before now, “all items less farm produces” is referred to as the Core inflation. This was because the prices of items that constitute energy were regulated by the government e.g, Petroleum Motor Spirit (PMS). Due to the deregulation of the sector and the removal of the fuel subsidy, all the items that constitute energy are now determined by market forces and hence their prices are termed volatiles. Therefore, Core inflation is referred to as all items index less farm produces and energy.”

The “All items less farm produces and energy” or Core inflation, which excludes the prices of volatile agricultural produces and energy stood at 22.58% in October 2023 on a year-on-year basis; an increase of 5.12% when compared to the 17.46% recorded in October 2022.

“The highest increases were recorded in prices of Passenger Transport by Road, Medical Services, Passenger Transport by Air, Actual and Imputed Rentals for Housing, Pharmaceutical products etc. On a month-on-month basis, the Core Inflation rate was 1.39% in October 2023 compared to September 2023 which stood at 2.22%, this shows a decline of 0.83%. The average twelve-month annual inflation rate ending October 2023 was 19.98%; this was 4.60% points higher than the rate recorded for the twelve-month average ending October 2022 (15.38%).”

According to the NBS “in October 2023, the All-Items inflation rate on a Year-on-Year basis was highest in Kogi (34.20%), Rivers (31.44%), Lagos (31.23%), while Borno (20.06%), Jigawa (23.52%) and Sokoto (24.47%) recorded the slowest rise in Headline inflation on Year-on-Year basis.

“On a Month-on-Month basis, however, October 2023 recorded the highest increases in Yobe (3.72%), Jigawa (2.85%), Sokoto (2.84%), while Kogi (1.01%), Edo (1.05%) and Kwara (1.18%) recorded the slowest rise on Month-on-Month inflation.”

The NBS report further said “in October 2023, Food inflation on a Year-on-Year basis was highest in Kogi (41.74%), Kwara (38.48%) and Lagos (37.37%), while Borno (24.41%), Kebbi (24.90%) and Jigawa (25.10%) recorded the slowest rise in Food inflation on a Year-on-Year basis. On a Month-on-Month basis, however, October 2023 Food inflation was highest in Yobe (5.35%), Sokoto (3.68%) and Jigawa (3.45%), while Edo (0.95%), Katsina (1.03%) and Rivers (1.10%) recorded the slowest rise in inflation on Month-on-Month basis.

“However, on a month-on-month basis, the headline inflation rate in October 2023 was 1.73%, which was 0.37% lower than the rate recorded in September 2023 (2.10%). This means that in October 2023, the rate of increase in the average price level is less than the rate of increase in the average price level in September 2023.

“The percentage change in the average CPI for the twelve months ending October 2023 over the average of the CPI for the previous twelve-month period was 23.44%, showing a 5.57% increase compared to 17.86% recorded in October 2022.

“On a year-on-year basis, in October 2023, the Urban inflation rate was 29.29%, this was 7.66% points higher compared to the 21.63% recorded in October 2022. On a month-on-month basis, the Urban inflation rate was 1.81% in October 2023, this was 0.43% points lower compared to September 2023 (2.24%). The corresponding twelve-month average for the Urban inflation rate was 24.76% in October 2023. This was 6.38% points higher compared to the 18.38% reported in October 2022.

“The Rural inflation rate in October 2023 was 25.58% on a year-on-year basis; this was 5.01% higher compared to the 20.57% recorded in October 2022. On a month-on-month basis, the Rural inflation rate in October 2023 was 1.67%, declined by 0.29% points compared to September 2023 (1.96%). The corresponding twelve-month average for the Rural inflation rate in October 2023 was 22.23%. This was 4.85% higher compared to the 17.38% recorded in October 2022. The Food inflation rate in October 2023 was 31.52% on a year-on-year basis, which was 7.80% points higher compared to the rate recorded in October 2022 (23.72%).”

We’re working to halt continued inflation rise – CBN

Meanwhile, Nigeria’s headline inflation rate, on a month-on-month basis, in October 2023, stood at 1.73%, 0.37% lower than the rate recorded in September 2023.

In a conversation with newsmen in Abuja on Wednesday on the latest NBS figures, the spokesman of the Central Bank of Nigeria, Isa AbdulMumin, expressed optimism that the low rate of increase in the average price level in October compared to September 2023, was a pointer to the fact that the Bank’s monetary policy stance to tighten rates and its money market reforms were yielding the desired effect.

Aggressive monetary tightening using various liquidity mechanisms including removing the cap on the Standing Deposit Facility (SDF) and Open Market Operations had raised Open Buy Back (OBB) rates from less than 1% in August to their expected levels around the monetary policy rate today in spite of 0.61% increase in the headline inflation rate from 26.72% in September 2023 to 27.33% in October 2023.

Isa remained optimistic that the CBN was headed in the desired direction in terms of achieving price stability.

According to him, available statistics showed that the first indication of deceleration in prices was recorded in September and further reforms in the money market, which commenced in October, had accelerated easing in prices as indicated by the substantial drop in month-on-month changes recorded in October.

“Moderation in month-on-month changes in prices observed in the headline, food and core components of the consumer basket followed reforms in the money market and relative stability in the FX market,” he added.

NGX rebounds with N113.07bn gain for investors

On Wednesday, the Lagos bourse extended gains for the second consecutive session as the benchmark Index ended 0.25% stronger to close at 71,014.34 points.

Gains in MTNN (+0.21%), BUACEMENT (+1.96%) and GTCO (+1.93%) outweighed losses in ZENITHBANK (-1.89%), DANGSUGAR (-0.16%) and UBA (-0.48%).

As a result, the ASI year-to-date (YTD) rose to 38.56%, while market capitalization increased by ₦113.07bn to close at ₦39.05trn.

Analysis of Wednesday’s market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 82.89%.

A total of 297.35m shares valued at ₦6.16bn were exchanged in 6,172 deals. OANDO (+10.00%) led the volume chart with 27.97m units while NESTLE (+2.44%) led the value chart in deals worth ₦2.34bn.

Market breadth closed positive at a 1.67-to-1 ratio with advancing issues outnumbering declining ones. OANDO (+10.00%), topped twenty one (21) others on the leader’s table, while SOVRENINS (-8.82%) led fourteen (14) others on the laggard’s table.

Labour suspends nationwide strike

The National Executive Council of the Nigeria Labour Congress and the Trade Union Congress on Wednesday night suspended the ongoing strike.

The unions said the suspension followed the intervention of the National Security Adviser, Nuhu Ribadu.

It was gathered that the meeting which commenced at a few minutes past 7 pm lasted for close to one hour during which various affiliates and state chapters reviewed the outcome of the meeting held between the leaders of the organised labour and Ribadu.

The National Deputy Vice-President of the TUC, Tommy Etim, made this known in an interview with journalist in Abuja on Wednesday night.

“The NEC of the NLC and the TUC has suspended the strike. We did this based on our trust for the National Security Adviser, Nuhu Ribadu, who gave us his words,” he said.

The labour leaders met with Ribadu alongside the Minister of Labour, Simon Lalong, at the Office of the NSA on Wednesday afternoon.

The NSA had announced that the individuals responsible for the brutalisation of Ajaero had been arrested.

The organised labour is protesting against the alleged brutalisation of its National President, Joe Ajaero, and the failure of the government to implement some of the agreements reached on October 2, 2023 effectively.