By Samuel Bankole
Nigerian consumer inflation rate jumped in October to 14.2 percent, for the 14th consecutive period compared with 13.71 percent in the previous month as food prices rocketed across Africa’s most populous country.
Data from the National Bureau of Statistics (NBS) on Monday showed that the composite food index rose by 17.38 percent in October 2020 compared to 16.66 percent in September 2020.
The bureau said the rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits, Vegetable, alcoholic and food beverages and Oils and Fats.
“On month-on-month basis, the food sub-index increased by 1.96 percent in October 2020, up by 0.08
percent points from 1.88 percent recorded in September 2020.
“The average annual rate of change of the Food sub-index for the twelve-month period ending October 2020 over the previous twelve-month average was 15.42 percent, representing a 0.29 percent points from the average annual rate of change recorded in September 2020 (15.13) percent,” the NBS stated.
Nigeria’s inflation has consistently surged for a 14th straight month in October on rising food prices caused by border closures, dollar restrictions and banditry attacks that are preventing farmers from producing food.
The Central Bank of Nigeria had a targeted inflation rate with a range of 6-9 percent, but the country’s regulatory bank continues to miss its projection due many factors ranging from dollar shortage, hike in cost of domestic consumption of fuel and closure of the border.
The inflation rate may probably continue accelerating due to an end of fuel subsidies, currency weakness, typical price hikes related to the festive season and a recent order by President Muhammadu Buhari that restricts dollar access for food and fertilizer imports.
Dollar shortage has continued to hamper productivities by the manufacturing firms who could not get enough forex to finance raw material and machinery purchases.
Analysts said food prices have been a key driver of inflation in Africa’s biggest economy. The food index, which accounts for more than half the inflation basket, rose 17.4 percent, compared with 16.66 percent in September.
Floods, violent farm attacks, and clashes between herders and farmers weigh on supply, though the government’s softening stance on border closures in place since August 2019 may reduce pressures.
An unexpected cut in the key interest rate by 100 basis points in September will probably mean the central bank will hold the rate at 11.5 percent next week as it seeks to support a recovery in Africa’s largest economy, even as inflation remains sticky.