Cost Of Feeding Worsens As Food Inflation Hits 32.84%

Nigerians are finding it more difficult to feed themselves, as food inflation rose to 32.84 per cent in November.

According to the National Bureau of Statistics’ Consumer Price Index: November 2023’ report released, headline inflation surged to 28.20 per cent in November from 27.33 per cent in October.

The cost of food rose highest in Kogi, Kwara, and Rivers where food inflation in each state surged to 41.29 per cent, 40.72 per cent, and 40.22 per cent respectively.

The food inflation rate in November was 8.72 percentage points higher than what was recorded in November 2022 (24.13 per cent).

The report showed that the rise in food prices was caused by increases in the prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables and coffee, tea and cocoa.

The NBS said, “On a month-on-month basis, the food inflation rate in November 2023 was 2.42 per cent this was 0.51 per cent higher compared to the rate recorded in October 2023 (1.91 per cent).

“The average annual rate of Food inflation for the twelve-months ending November 2023 over the previous twelve-month average was 27.09 per cent, which was a 6.68 percentage points increase from the average annual rate of change recorded in November 2022 (20.41 per cent).”

It further noted that food was cheapest in Bauchi (26.14 per cent), Borno (27.34 per cent), and Jigawa (27.63 per cent).

In November, Nigeria’s inflation rate continued its climb to another record 18-year high. According to the country’s statistics body, headline inflation surged by 0.87 percentage points in November to a new record high in almost two decades.

It stated, “In November 2023, the headline inflation rate increased to 28.20 per cent relative to October 2023 headline inflation rate which was 27.33 per cent. Looking at the movement, the November 2023 headline inflation rate showed an increase of 0.87 per cent points when compared to the October 2023 headline inflation rate.

“On a year-on-year basis, the headline inflation rate was 6.73 per cent points higher compared to the rate recorded in November 2022, which was 21.47 per cent. This shows that the headline inflation rate (year-on-year basis) increased in November 2023 when compared to the same month in the preceding year (i.e., November 2022).”

Largely driven by the surge in the price of food, month-month headline inflation last month was 2.09 per cent, which was 0.35 percentage points higher than what was recorded in October (1.73 per cent), defeating a recent claim by the Central Bank of Nigeria that inflation is slowing down m-o-m.

Recently, the former apex bank’s Director of the Corporate Communications Department, Isa AbdulMumin, said, “Available statistics showed that the first indication of deceleration in prices was recorded in September.

“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.”

Inflation was worse in Kogi (33.28 per cent), Lagos (32.30 per cent), Rivers (32.25 per cent), which had higher rates than the national average and lowest in Borno (22.47 per cent), Katsina (24.91 per cent), and Plateau (25.53 per cent).

The removal of fuel subsidy and the foreign exchange rate unification policy have been blamed for the recent surge in the country’s inflation.

In the December update of its Nigeria Development Update report, the World Bank noted that since May, petrol prices had increased by an average of 163 per cent and the naira had depreciated against the US dollar by 41 per cent in the official market and by 30 per cent in the parallel market.

Those, it said, had combined to push inflation upwards with higher prices of gasoline and other imported goods, fueling the surge.

It noted, “The impact of this inflation is especially hard on the poor and vulnerable. The government has initiated targeted cash transfers to mitigate some of the impact on the most vulnerable households.

“In addition, a holistic approach to reducing inflation, including through tighter fiscal and monetary policies, is also needed.”

The bank highlighted that sluggish growth and rising inflation in the country increased poverty from 40 per cent in 2018 to 46 per cent in 2023, pushing an additional 24 million people below the national poverty line.

The number of poor in the country rose from 79 million in 2018 to 104 million in 2023.

It, however, noted that in the medium term, the reforms (fuel subsidy and exchange rate unification) would reverse that trend through higher growth and lower inflation, but to a limited extent.

It added that poverty rates would eventually decrease from 46 per cent in 2024 to 44 per cent in 2026.

The Bretton-Woods institution, however, projected that inflation would fall in 2024 and beyond if monetary policy tightening was accelerated.

Recently, the CBN Governor, Olayemi Cardoso, noted that the apex bank intended to focus on inflation and stabilise prices.

 

Olusola Akintonde/Punch