Inflation spikes to 13.71% as food prices soar, more Nigerians drop into poverty

The Nigerian inflation rate further spiked to 13.71 per cent in September 2020 indicating 0.49% point higher than 13.22% recorded in August 2020. This means that the cost of living in Nigeria is getting higher and more Nigerians are dropping into the poverty line. The rise in inflation rate is contained in the Consumer Price Index report by the National Bureau of Statistics (NBS).  According to the report, Nigeria has endured persistent increase in inflationary rate, growing from 12.13% in January to 13.71% in September, which is highest recorded in 30 months. This is coming in the face of economic depression caused by COVID-19 where several Nigerians have lost their jobs and those living on retirement benefit and savings are constrained by monetary policy that has reduced drastically earnings from fixed income. 

On a month-on-month basis, the headline index increased by 1.48% in September 2020. This is 0.14% rate higher than the rate recorded in August 2020. Also, the urban inflation rate increased by 14.31% in review period from 13.83% recorded in August 2020, while the rural inflation rate increased by 13.14% in September 2020 from 12.65% in August 2020.  A closely watched component of the inflation index, rose by 16.66% in September 2020, 0.66% increased compared to 16% recorded in the previous month, while on a month-on-month basis, the food sub-index rose by 1.88% compared to 1.67% recorded in August 2020. 

Meanwhile, the rise in the food index was caused by increases in prices of Bread and Cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits and Oils and fats.  The Core inflation also known as “All items less farm produce”, which excludes the prices of volatile agricultural produce stood at 10.58% September 2020, up by 0.06% when compared with 10.52% recorded in August 2020.  The highest increases were recorded in prices of Passenger transport by air, Medical services, Hospital services, Pharmaceutical products, Passenger transport by road, Motor cars, Vehicle spare parts, Maintenance and repair of personal transport equipment, Repair of furniture and Paramedical services.  Northern states in Nigeria top the list of States that recorded highest inflation in the month of September, with Bauchi State leading the list at 17.85%, closely followed by Zamfara at 17.42% and Kogi State at 16.66%. Others on the list are Yobe (15.71%) and Plateau (15.61%). 

On the flip side, Kwara State recorded the least inflation rate at 10.53%, followed by Abuja at 10.59%, Lagos (11.19%), Ondo and Cross River State at 11.76% and 11.81% respectively.  Inflations rate at 13.71% and food inflation at 16.66% indicates that the purchasing power of consumers is consistently and rapidly declining on monthly basis, despite income of most Nigerians pegged at a fixed level while others earning lower income.