Nigeria’s inflation rises for 16th consecutive month to 15.75 per cent

Sustained rise in food prices in Nigeria continued to be a major inflationary pressure as the country's Consumer Price Index (CPI) jumped to 15.75 per cent year-on-year in December 2020, representing 86 basis points (bps) (or 0.86 percentage point) increase, compared to 14.89 per cent reported in November 2020. This is according to the latest monthly inflation report released on Friday by the National Bureau of Statistics (NBS).

The latest inflation figure shows the headline index has been rising for sixteen consecutive months. It is also the highest inflation rate recorded since November 2017 when the CPI stood at 15.90 per cent.

On a month-on-month basis, the CPI – which measures inflation – rose by 1.61 per cent in December, or 0.01 percentage point higher than the rate recorded in the previous month (1.60 per cent). This was the highest monthly increase in the headline index in 45 months, since the 1.72 per cent recorded in March 2017.

There were increases in all major indices that yielded the latest data for the main inflation index, according to the NBS. However, the report shows the inflation rate was primarily driven by the acceleration in food inflation. Like the headline index, the food sub-index in December was also the highest recorded in over three years.

Food inflation – which accounts for more than half the inflation basket – rose by 126 bps to 19.56 per cent last month compared to 18.30 per cent reported in November 2020, according to the statistics agency.

The agency said the rise in the food inflation was caused by increases in the prices of bread and cereals; potatoes, yam and other tubers; oils and fats; fish and meat; and vegetable and fruits. On a month-on-month basis, the food sub-index increased by 2.05 per cent in December, up by 1 bp when compared to 2.04 per cent recorded in the preceding month.

Based on state profiles, food inflation was highest in Edo (24.14 per cent), Kogi (23.14 per cent) and Sokoto (22.24 per cent), while Bauchi (16.53 per cent), Abia (16.04 per cent) and Nasarawa (15.71 per cent) recorded the slowest rise.

Core inflation, which excludes the prices of volatile agricultural produce, stood at 11.37 per cent in December, up by 0.32 percentage point when compared to the preceding review period. The NBS said the highest increases were recorded in prices of passenger transport by air, pharmaceutical products, hospital and medical services, paramedical services, dental services, maintenance and repair of personal transport equipment.

Price increases were also recorded in vehicle spare parts, motor cars, motorcycle and bicycles, hairdressing salons and personal grooming establishments, shoes and other footwear, passenger transport by road, and miscellaneous services relating to the dwelling.

According to the NBS, urban inflation rose by 86 bps to 16.33 per cent last month compared to 15.47 per cent recorded in the previous month, while rural inflation increased by 87 bps to 15.20 per cent in December from 14.33 per cent in November. The latest data shows the headline inflation rate has risen by 473 bps since August 2019, while the food inflation rate has risen by 639 bps in the same period.