Inflation rate hits 27.33%, worsening cost of living in Nigeria

National Bureau of Statistics NBS has said that in the month of October 2023, headline inflation rate increased to 27.33% relative to the September 2023 headline inflation rate which was 26.72%. Looking at the movement, the October 2023 headline inflation rate showed an increase of 0.61% points when compared to the September 2023 headline inflation rate. Furthermore, on a year-on-year basis, the headline inflation rate was 6.24% points higher compared to the rate recorded in October 2022, which was (21.09%). This shows that the headline inflation rate (year-on-year basis) increased in October 2023 when compared to the same month in the preceding year (i.e., October 2022). Inflation in the country rose for the tenth month in a row in October, increasing pressure on the new central bank governor to raise interest rates when the monetary policy committee meets for the first time since his appointment.

NBS inflation report for the month of October said “the rise in Food inflation on a year-on-year basis was caused by increases in prices of Bread and cereals, Oil and fat, Potatoes, Yam and other Tubers, Fish, Fruit, Meat, Vegetables and Milk, Cheese and Eggs. On a month-on-month basis, the Food inflation rate in October 2023 was 1.91% this was 0.54% lower compared to the rate recorded in September 2023 (2.45%). The decline in Food inflation on a month-over-month basis was caused by the decline in the rate of increase in the average prices of Fruits, Oil and fat, Coffee, Tea and Cocoa, Bread and Cereals. The average annual rate of Food inflation for the twelve months ending October 2023 over the previous twelve-month average was 26.33%, which was a 6.50% points increase from the average annual rate of change recorded in October 2022 (19.83%). Before now, “all items less farm produces” is referred to as the Core inflation. This was because the prices of items that constitute energy were regulated by the government e.g, Petroleum Motor Spirit (PMS). Due to the deregulation of the sector and the removal of the fuel subsidy, all the items that constitute energy are now determined by market forces and hence their prices are termed volatiles. Therefore, Core inflation is referred to as all items index less farm produces and energy.

The “All items less farm produces and energy” or Core inflation, which excludes the prices of volatile agricultural produces and energy stood at 22.58% in October 2023 on a year-on-year basis; an increase of 5.12% when compared to the 17.46% recorded in October 2022. The highest increases were recorded in prices of Passenger Transport by Road, Medical Services, Passenger Transport by Air, Actual and Imputed Rentals for Housing, Pharmaceutical products etc. On a month-on-month basis, the Core Inflation rate was 1.39% in October 2023 compared to September 2023 which stood at 2.22%, this shows a decline of 0.83%. The average twelve-month annual inflation rate ending October 2023 was 19.98%; this was 4.60% points higher than the rate recorded for the twelve-month average ending October 2022 (15.38%)”.

According to NBS “in October 2023, the All-Items inflation rate on a Year-on-Year basis was highest in Kogi (34.20%), Rivers (31.44%), Lagos (31.23%), while Borno (20.06%), Jigawa (23.52%) and Sokoto (24.47%) recorded the slowest rise in Headline inflation on Year-on-Year basis. On a Month-on-Month basis, however, October 2023 recorded the highest increases in Yobe (3.72%), Jigawa (2.85%), Sokoto (2.84%), while Kogi (1.01%), Edo (1.05%) and Kwara (1.18%) recorded the slowest rise on Month-on-Month inflation”. The NBS report further said “in October 2023, Food inflation on a Year-on-Year basis was highest in Kogi (41.74%), Kwara (38.48%) and Lagos (37.37%), while Borno (24.41%), Kebbi (24.90%) and Jigawa (25.10%) recorded the slowest rise in Food inflation on a Year-on-Year basis. On a Month-on-Month basis, however, October 2023 Food inflation was highest in Yobe (5.35%), Sokoto (3.68%) and Jigawa (3.45%), while Edo (0.95%), Katsina (1.03%) and Rivers (1.10%) recorded the slowest rise in inflation on Month-on-Month basis.

“However, on a month-on-month basis, the headline inflation rate in October 2023 was 1.73%, which was 0.37% lower than the rate recorded in September 2023 (2.10%). This means that in October 2023, the rate of increase in the average price level is less than the rate of increase in the average price level in September 2023. The percentage change in the average CPI for the twelve months ending October 2023 over the average of the CPI for the previous twelve-month period was 23.44%, showing a 5.57% increase compared to 17.86% recorded in October 2022. On a year-on-year basis, in October 2023, the Urban inflation rate was 29.29%, this was 7.66% points higher compared to the 21.63% recorded in October 2022. On a month-on-month basis, the Urban inflation rate was 1.81% in October 2023, this was 0.43% points lower compared to September 2023 (2.24%). The corresponding twelve-month average for the Urban inflation rate was 24.76% in October 2023. This was 6.38% points higher compared to the 18.38% reported in October 2022..

“The Rural inflation rate in October 2023 was 25.58% on a year-on-year basis; this was 5.01% higher compared to the 20.57% recorded in October 2022. On a month-on-month basis, the Rural inflation rate in October 2023 was 1.67%, declined by 0.29% points compared to September 2023 (1.96%). The corresponding twelve-month average for the Rural inflation rate in October 2023 was 22.23%. This was 4.85% higher compared to the 17.38% recorded in October 2022. The Food inflation rate in October 2023 was 31.52% on a year-on-year basis, which was 7.80% points higher compared to the rate recorded in October 2022 (23.72%)”.