The Consumer Price Index (CPI) which measures the rate of change in prices of goods and commodities increased to 21.47 per cent year-on-year in November, compared to 15.40 per cent in the corresponding month of 2021, the National Bureau of Statistics (NBS) stated yesterday.
The inflation numbers came on same day the World Bank stated that for Nigeria to return to its 'rising growth star' status of between 2001 and 2010, the country must embark on reforms it classified into three categories namely: sprint, medium distance runs and marathon.
According to the NBS, the 6.07 per cent increase in the headline index implied that the general price level was higher in the review month relative to November 2021.
The CPI report for November, month-on-month, however showed that headline inflation rate was 1.39 per cent, which was 0.15 per cent higher than the 1.24 per cent recorded in October.
The NBS noted that food inflation increased to 24.13 per cent year-on-year which was 6.92 per cent higher than the 17.21 per cent recorded in November 2021.
The rise in food inflation was caused by increase in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, food products and fish.
However, month-on-month, the food inflation was 1.40 per cent, which was 0.17 per cent higher than the 1.23 per cent recorded in October.
On the other hand, core inflation, which excluded the prices of volatile agricultural produce also rose by 4.39 per cent to 18.24 per cent year on year in November, compared to 13.85 per cent recorded in November 2021.
On a month-on-month basis, the core inflation also increased to 1.67 per cent in November, from 0.93 per cent in October.
The highest increases in the core index were recorded in the prices of gas, liquid fuel, passenger transport by air, vehicle spare parts, and solid fuel.
According to the statistical agency, the increase in the monthly inflation rate could be attributed to the sharp increase in demand usually experience during the festive season.
Also on an annualised basis, inflation spiked due to the increase in the cost of importation due to the persistent currency depreciation as well as a general increase in the cost of production, particularly increase in energy cost.
Year-on-year, the urban inflation rate surged to 22.09 per cent, which was 6.17 per cent higher, compared to the 15.92 per cent recorded in November 2021.
Month-on-month, the urban index also rose to 1.50 per cent in November, compared to 1.33 per cent in the preceding month.
Furthermore, the rural inflation rate was 20.88 per cent on a year-on-year basis, which was 5.99 per cent higher compared to the 14.89 per cent recorded in same period last year.
Month-on-month, the rural inflation was 1.30 per cent, up by 0.14 per cent compared to 1.16 per cent in October.
At the states level, year-on-year, the headline index was highest in Ebonyi (26.11 per cent), Kogi (25.84 per cent), Rivers (24.45 per cent), while Kaduna (18.87 per cent), Sokoto (19.02 per cent) and Cross river (19.17 per cent) recorded the slowest rise in inflation.
Month-on-month, however, highest increases were also recorded in Ebonyi (3.16 per cent), Niger (2.70 per cent), Plateau (2.44 per cent), while Ogun (-0.17per cent), Abuja (-0.12 per cent) and Sokoto (0.25 per cent) recorded the slowest rise.
Also, food inflation on a year-on-year basis was highest in Kwara (29.74 per cent), Kogi (29.51 per cent), and Ebonyi (28.25 per cent), while Kaduna (19.30 per cent), Sokoto (19.48 per cent) and Jigawa (20.55 per cent) recorded the slowest rise.
Similarly, month-on-month inflation at the states level inflation was highest in Nasarawa (2.87 per cent), Delta (2.66 per cent), and Plateau (2.53 per cent), while Sokoto (-0.94 per cent), Ogun (-0.34 per cent) and Yobe (-0.10 per cent) recorded the slowest rise.
Again, W'Bank Urges Nigeria to Remove Import Restrictions, Adopt Single FX Rate
Meanwhile, to return to its 'rising growth star' status of between 2001 and 2010, the World Bank has urged Nigeria to embark on reforms it classified into three categories namely: sprint, medium distance runs and marathon.
In a report titled: "Nigeria's Choice", in its latest Nigeria Development Update (NDU), which was launched in Abuja, the multilateral institution stated that to reduce its vulnerability to crisis and rise to its potential, in the short term, Nigeria must adopt a single market-reflective exchange rate, increase non-oil revenues by raising Value Added Tax (VAT) and excise rates and strengthen its tax administration efforts.
As an investment accelerator in the short run, the bank called on Nigeria to facilitate trade and boost domestic value addition by removing import and foreign exchange restrictions.
But it said what Nigeria could do in the medium term was to eliminate petrol subsidy by establishing a 'compact' which also protects the poor and vulnerable as well as contain inflation by reducing the government's recourse to the Central Bank of Nigeria (CBN) financing.
Still in the medium term, the World Bank advised that Nigeria should increase access to finance by strengthening institutional infrastructure for financial intermediation.
However, in the long run, the Washington-based institution urged Nigeria to boost competition by embedding it into policy, enhance enforcement and simplify rules to lower costs as well as reduce insecurity by strengthening the rule of law.
Furthermore, it stated that Nigeria would be able to attract investment in the long-term by boosting power generation and investing in infrastructure to reduce technical and commercial losses and facilitate transport connectivity by reducing interstate transportation costs.
The bank added that Nigeria's economy needed to grow faster to reduce poverty, stressing that despite favourable global oil prices, "business as usual" economic management was not delivering desired outcomes and that even if a crisis was avoided in the near-term, long-standing policy and institutional challenges were persisting and severely constraining the economy.
This, it said, hinders the prospects of the vast majority of the country's people, with at least 80 million living in extreme poverty. It however noted that whether to continue down this path, or to instead chart a new course and rise to its tremendous potential, was Nigeria's choice to make.
Stressing that Nigeria's economic growth had slowed on the back of declining oil output and moderating non-oil activity, the World Bank explained that real Gross Domestic Product (GDP) rose by 3.1 per cent year-on-year (y-o-y) in the first three quarters of 2022, little more than the annual population growth of 2.6 per cent.
Nigeria's growth performance and its fiscal and external buffers, it pointed out, have also decoupled from high oil prices, while macroeconomic vulnerabilities have increased.
"It is urgent to address the key drivers of this decoupling and make reforms to strengthen Nigeria's macro-fiscal framework," the bank advised.
"Nigeria has a choice to implement critical macroeconomic and structural reforms that can reduce crisis vulnerabilities and increase growth. Doing so will lift per-capita incomes, sustainably reduce poverty and deliver better life outcomes for many Nigerians," said the World Bank's Country Director for Nigeria, Shubham Chaudhuri.
"Urgent business-unusual choices are needed to avoid a scenario in which up to 80 million working-age Nigerians do not have a full-time job by 2030 and up to 23 million more Nigerians could be living in extreme poverty," he added.
The report recalled that inflation had surged to 21.1 per cent y-o-y in October 2022, pushing as many as 5 million more Nigerians into poverty since the start of 2022 and fiscal pressures have intensified, exacerbated by the soaring cost of the petrol subsidy which will likely exceed N5 trillion this year.
Despite higher oil export revenues, the bank highlighted that official reserves have fallen. It noted that the currency market was severely distorted, undermining the business environment and investment. The weaknesses in the macroeconomic policy framework, it stated were suppressing growth and making Nigeria more vulnerable to shocks.
"Previous episodes of reform progress and high growth, such as in the 2000s, show that Nigeria's economy can turn around quickly, and its tremendous economic potential that could be unleashed is well-known.
"If Nigeria chooses to make reforms that stabilise its macro-fiscal policy settings and support investment, this would be transformative for 80 million poor Nigerians, for Nigeria as a whole, and for Africa," the World Bank's Lead Economist for Nigeria and co-author of the report, Alex Sienaert stated.
Drawing from a new World Bank Nigeria Report - the Nigeria Country Economic Memorandum (CEM), the bank lamented that despite its vast potential, development has stagnated in Nigeria over the past decade.
"The country is characterised by strong spatial inequalities and a large north-south divide. Creating better jobs is a necessary condition for accelerating poverty reduction and economic transformation.
"A combination of limited job creation, booming demographics, and unfulfilled aspirations is pushing young Nigerians to emigrate abroad in search of gainful employment.
"As a result, Nigeria is at a critical historical juncture, with a choice to make. To chart a new and inclusive growth path, Nigeria needs macroeconomic and institutional enablers and investment accelerators.
"To catalyse private investment and offer more opportunities to the youth, the priority is to restore and preserve macroeconomic stability. To do so, it will be critical to improve the availability of FX, and the predictability and credibility of the exchange rate system to ensure a level playing field across all firms and individuals," it added.
Admitting that there was no silver bullet to accelerate growth, it explained that Nigeria could become a 'rising growth star again' if it implements a comprehensive set of bold reforms in a timely manner, adding that to implement this set of prioritised reforms, the authorities need to walk the talk and shift their focus from the "what" to the "how".
"Nigeria can become a rising growth star again if it implements a comprehensive set of bold reforms in a timely manner," it stressed.
The World Bank added: "Nigeria was a rising growth star globally in the 2000s due to the implementation of several structural reforms in a context of increasing oil prices; yet this fast growth was not accompanied by robust job creation.
"Between 2001 and 2010, Nigeria ranked among the top 15 fastest growing economies in the world, with an average annual growth rate of 8.2. However, the hard-won income gains from the 2000s evaporated between 2011 and 2021, due to the lack of deeper structural reforms, global shocks, conflicting macroeconomic policies, and increased insecurity percent.
"Creating more and better jobs is a necessary condition for accelerating poverty reduction and economic transformation in Nigeria. Unlocking private investment will enable the creation of more and better-quality jobs in a sustainable manner.
"To catalyse private investment and offer more opportunities to the youth, the priority is to restore and preserve macroeconomic stability, which has weakened in recent years due to conflicting monetary policy goals, over-reliance on oil exports, limited fiscal space, and restrictive trade policies."
Speaking during the launch of the report, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed stated that oil production was expected to increase to 1.6 million barrels per day (bpd) by the first quarter of 2023, adding that efforts were on to intensify to improve oil production infrastructure and reduce theft.
"We currently project an average crude oil production of about 1.9 million barrels condensate inclusive by 2024. We expect to complete the rehabilitation of the Port-Harcourt refinery before the end of 2023.
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"We have also signed the memorandum of understanding with Daewoo operation for $1.5 billion for the rehabilitation of the Kaduna and Warri refineries.
"The importation of petroleum products would significantly decline in 2023 as the Dangote refinery is expected to begin operation in the first quarter of 2023.
"The expected improvement in oil production numbers is also attributable to the increase in collaboration between the government, security agencies, private security outfits, host communities and deployment of technology to curb the menace of crude oil theft.
"We expect to see more investors in the oil sector as we achieve greater clarity, a robust regulatory framework to support investment and growth as provided in the petroleum industry act," the minister said.
She said Nigeria needs help, stressing that the Nigerian government and the sub-national levels cannot provide all the financing required to meet Nigeria's public investment needs.
"As stated in the National Development Plan (NPD), we need the private sector, foreign and domestic as integral partners in securing the much-needed financing required to fund both fiscal and social investments for Nigeria's overall development," Ahmed added.
On his part, Kaduna State Governor, Mallam Nasir el-Rufai said Nigeria's next president must be willing to take very difficult, immediate, and urgent decisions that would make the country go through about three to five years of pain, and reverse the ugly trajectory.
He said he was proud to be a member of the Obasanjo administration, "during that decade of growth. We were in that government we knew what we had to do."
El-Rufai added, "We know what President Obasanjo had to do. The next president of Nigeria must be willing to do just one term if necessary but reverse this trend. The consensus is there.
"If 95 per cent of jobs are from the private sector, 90 per cent of GDP is from the private sector. The private sector agrees that these things must be done. The state governments have agreed that these things must be done.
"I've told you the two big elephants are subsidy and the exchange rate and those at the receiving end of this are the private sectors and the sub-nationals.
"We have agreed. What we need is a president willing to expend political capital and take risks to reverse the trajectory of this country on a permanent basis even if it costs him the election it might because the results may not begin to show until after three to five years.
"The only problem I have with the World Bank three options is that the potential graph shows that it can go up immediately. It can't for the next two, or three years. It will go down.
"Things are not going to get better in the next two to three years. even If you do the right policies tomorrow.
"It will take time but that president will change that direction or that country will remove the word potential from Nigeria's vocabulary and will finally be the country we deserve to be.
