Nigeria: Inflation Rate Hits 30-Month High At 13.7% - NBS

16 October 2020

The National Bureau of Statistics (NBS) yesterday reported that inflation rate in Nigeria rose to a 30-month high of 13.71 percent in September, 2020, 0.49 percent up from 13.22 percent recorded in August.

This represents the highest inflation rate the country has recorded since March 2018 when it stood at 13.34 percent.

Meanwhile, analysts at United Capital Management Limited have projected that the ongoing Special Anti-Robbery Squad (SARS) protests, high financial system liquidity without commensurate increase in economic output, food supply shortages, structural bottlenecks and currency market challenges will further pressure the nation's headline inflation till the end of the year.

The NBS report stated: "The consumer price index (CPI) which measures inflation increased by 13.71 percent (year-on-year) in September 2020. This is 0.49 percent points higher than the rate recorded in August 2020 (13.22) percent. Increases were recorded in all Classification of Individual Consumption According to Purpose (COICOP) divisions that yielded the headline index.

"On a month-on-month basis, the headline index increased by 1.48 percent in September 2020. This is 0.14 percent rate higher than the rate recorded in August 2020 (1.34 percent).

"The urban inflation rate increased by 14.31 percent (year-on-year) in September 2020 from 13.83 percent recorded in August 2020, while the rural inflation rate increased by 13.14 percent in September 2020 from 12.65 percent in August 2020.

"On a month-on-month basis, the urban index rose by 1.56 percent in September 2020, up by 0.14 from 1.42 percent recorded in August 2020, while the rural index also rose by 1.40 percent in September 2020, up by 0.13 from the rate recorded in August 2020 (1.27 percent)."

On food inflation, NBS said:"Composite food index rose by 16.66 percent in September 2020 compared to 16.00 percent in August 2020. This rise in the food index was caused by increases in prices of Bread and Cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits and Oils and fats.

"On month-on-month basis, the food sub-index increased by 1.88 percent in September 2020, up by 0.21 percent points from 1.67 percent recorded in August 2020."

Commenting on the development, analysts at United Capital Management said: "Looking ahead, we reiterate that the outlook for the headline inflation rate remains biased to the upside for the rest of the year despite recent suspension of the service reflective electricity tariffs.

"Notably, pressure on the food inflation sub-index is likely to continue till the end of the year due to supply shortages, structural bottlenecks and currency market challenges. Also, the ongoing social unrest across the nation which appears to be disrupting business activities is likely to leave a negative imprint on the headline numbers."

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