BY BAMIDELE FAMOOFO
Nigeria’s headline inflation rose by 105bps in July to 19.64 percent year on year (y/y) in July as against 18.60 percent recorded in June, 2022.
The figure released by the National Bureau of Statistics on Monday represents the highest point since September 2005 when headline inflation increased to 24.32 percent.
Food inflation also recorded its biggest increase in 14 months, rising by 142 basis points (bps) to 22.01 year on year.
The outturn in headline inflation is 2bps shy of Cordros’ estimate (19.66% y/y) and 24bps higher than Bloomberg’s median consensus estimate (19.40% y/y).
However, on a month-on-month basis, headline inflation was flat at 1.82 percent.
Pressures were most significant in the prices of bread and cereals, food products, potatoes, yam and other tubers, meat, fish, oil, and fat. On a month-on-month basis, food inflation increased by 2.04 percent, relative to the 2.05 percent month on month (m/m) recorded in the previous month.
Similarly, the core inflation rose by 51bps to 16.26 percent y/y compared to 15.75 percent in June. Core inflation also recorded its highest level since January 2017 (17.87% y/y). Notably, 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. Compared to the previous month; the core index advanced by 19bps to 1.75 percent m/m in July 2022.
Akwa Ibom State recorded the highest inflation rate in the month under review with 22.88%, closely followed by Ebonyi State with 22.51%. Others include Kogi (22.08%), Bayelsa (21.6%), and Rivers State (21.37%).
In terms of food inflation rate, Kwara State recorded the highest with 29.28%, followed by Akwa Ibom (27.22%). Kogi State recorded 26.08% food inflation rate in July 2022, while Ebonyi, and Ekiti State recorded 25.83% and 24.78% respectively.
Nigerians have had to deal with the rising cost of goods and services following the Russia-Ukraine war, which caused a significant rise in energy prices, spiralling into a global energy crisis and food supply issue.
Nigeria is one of the countries with significant uptick in its cost of living as a result of high inflationary pressure.
On a year-to-date basis, Nigeria’s inflation rate has increased by over 400 basis points from 15.63% recorded in December 2021 to 19.64% in the review month.
This implies that the consumer price index has increased by 12.7% between January and July 2022. This means that the purchasing power of Nigerians has been eroded. In basic terms, keeping income at a fixed level, Nigerians are not able to purchase as much as they have been able to with their monies.
