By Zainab Iwayemi
- The composite food index rose by 17.38%
A food crisis appears to be in the making in Nigeria, Africa’s largest economy by gross domestic products and the continent’s most populous. The country’s October inflation numbers were released on Monday and it showed that the inflation rate rose to 14.23 percent for the month, the highest since February 2018.
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But it was the composite food index, which rose by 17.36 percent that represents early signal of a food crisis ahead for a country where poverty has become rampant and a recent protest against police brutality was hijacked by hoodlums who burnt down shopping malls and looted warehouses where food palliatives meant to cushion the impact of the coronavirus pandemic on citizens were stashed away.
The National Bureau of Statistics (NBS), the government agency responsible for compiling inflation figures, among other national economic data, said the October inflation number had surged as a result of incessant increase in food items such as bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, vegetable, alcoholic and food beverages as well as oils and fats; though, the increment cuts across all classifications that yielded the headline index which rose on a month-on-month basis by 1.54 per cent in October, indicating a 0.06 per cent rate higher than 1.48 per cent recorded in September.
The October inflation rate represents a 0.52 per cent increment compared with the preceding month’s which stood at 13.71 per cent. It comes amidsta policy by the country to close its land borders to prevent smuggling, especially of rice, which it has banned to allow for local production of the staple; social unrest in the month of October; as well as scarcity of a number of agricultural produce as we approach the season of festivity in Nigeria.
Accordingly, the composite food index rose by 0.72 basis points to reach 17.38 per cent in October compared to 16.66 per cent recorded in the prior month. Similarly, the food sub-index increased on a monthly basis by 0.08 per cent points to 1.96 per cent in October from 1.88 per cent recorded in September; while the core inflation, which excludes the prices of volatile agricultural produce, stood at 11.14 per cent in October, rising by 0.56 per cent when compared with 10.58 per cent recorded in September, and the core sub-index increased by 1.25 per cent by 0.31 per cent when compared with 0.94 per cent last month.
A cursory look into the report further shows that the highest increases in the month of October were recorded in prices of passenger transport by air, hospital and medical services, passenger transport by road, pharmaceutical products, motor cars and vehicle spare parts, maintenance and repair of personal transport equipment, hairdressing salons and personal grooming establishments, miscellaneous services relating to the geographical area, paramedical services, as well as shoes and other footwear.
Furthermore, the state profiles on inflation revealed that Zamfara (17.69%), Sokoto (16.99%) and Ebonyi (16.91%) states recorded the highest inflation rates; while Lagos (11.96%), Abuja (11.84%) and Cross River (10.50%) states recorded the slowest rises in headline inflation on an annual comparison.
However, the annual rise in food inflation was highly felt across Edo (21.65%), Zamfara (20.88%) and Kogi (20.58%) states, as the brunt was mildly seen in Lagos (14.57%), Ogun (14.47%) and Ondo (14.23%) states within the last twelve months. The month on month data across the states profile revealed Kwara (3.88%), Edo (3.81%) and Sokoto (3.65%) states witnessed the highest surge in food prices on a monthly comparison, while Oyo (0.57%) Jigawa (0.54%) and Taraba (0.29%) states experienced the slowest price increases in food inflation under 30 days.
An upshot from the above is that as Nigeria’s economy grapples for recovery and growth in the closing months of the year, the inflation rate is projected to average 14.5 per cent by the close of the year on the back of covid-19 pandemic, the fluctuating oil prices, the weakening of the naira’s purchasing power and the anticipated relative growth of the economy as the statistics office is set to release the official output (GDP) result next week.
Frontpage October 15, 2019
Frontpage February 10, 2020