Nigeria’s statistical authority, the National Bureau of Statistics (NBS), Wednesday said inflation rate for the month of January 2018 moderated further to 15.13 percent, representing a 12th consecutive monthly decline year-on-year.
The report specifically indicated that headline inflation moderated 24 basis points (bps) from 15.37 percent in December 2017 to a 21-month low of 15.13 percent year on year in January.
This is despite increases recorded in all classification of individual consumption according to the purpose (COICOP) that yielded the headline index. The COICOP is used to classify both individual consumption expenditure and actual individual consumption.
On a month-on-month basis, the NBS said the headline index increased by 0.80 percent in January 2018, about 0.21 percent points higher from the rate of 0.59 percent recorded in December 2017.
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However, the percentage change in the average composite CPI for the twelve-month period ending January 2018 over the average of the CPI for the previous twelve-month period was 16.22 percent, showing 0.28 percent point lower from 16.50 percent recorded in December 2017.
The NBS noted that urban inflation rate rose by 15.56 percent (year-on-year) in January 2018 from 16.78 percent recorded in December 2017, while the rural inflation rate also eased by 14.76 percent in January 2018 from 15.02 percent in December 2017.
On the month-on-month basis, the urban index rose by 0.83 percent in January 2018, up by 0.17 from 0.66 percent recorded in December 2017, while the rural index also rose by 0.77 percent in January 2018, up by 0.23 when compared with 0.54 percent in December 2017.
The corresponding twelve-month year-on-year average percentage change for the urban index is 16.55 percent in January 2018. This is less than 16.92 percent reported in December 2017, while the corresponding rural inflation rate in January 2018 is 15.89 percent compared to 16.10 percent recorded in December 2017.
Commenting on the development, data analyst and CEO, Financial Derivatives Company, Mr. Bismarck Rewane said the current inflation rate favored people who reside in cities.
According to him, “urban inflation coming down much faster than rural inflation with about 0.96 percent which means if you leave in the cities like Lagos, we are enjoying surge rate of inflation than those in rural areas. This is because the cost of diesel is actually declining significantly, about a year ago diesel was in upper N200 but today is N190 per liter.”
Compared to other Africa countries, Rewane said the rate of inflation in Nigeria is declining but it could be much faster if the country can increase its output.
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What can increase the output according to him increases in the power supply, consistent productions from the farms, abolishing herdsmen and Boko Haram problems.
“If our farms’ output is positive, we will continue to increase further.”
Compared to Angola that has inflation of 23 percent, we have an inflation rate of 15.13 percent. Angola floated its currency recently, we are stabilized and supporting our currency at the rate of N360, the data looks positive but the impact reticent, he said.
Commenting on food index, Rewane said “the inflation in January is a beneficiary of harvest period of November, December, also inflation in January benefit from carryover of December harvest, which means if you bought a bag of rice in December and you didn’t finish it, you are not going to buy another one in January. In January we normally see prices come down.”
He, however, envisaged that there would be delayed the impact of the fuel scarcity incidents of December, January and February in the next inflation rate saying, that the fuel scarcity would affect transport fare.