UPDATED: Again, Nigeria’s inflation rate eases in August

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Nigeria’s annual inflation rate eased again in August after a persistent rise in nearly two years.

Inflation rate eased further to 32.15 per cent in August relative to the July headline inflation rate of 33.40 per cent, the National Bureau of Statistics (NBS) announced Monday.

Inflation indicators compare prices of goods and services in 12 months. A decline does not necessarily imply a reduction in prices; instead, it shows the rate of price increase had fallen compared to previous months.

According to the NBS, the August 2024 headline inflation rate showed a decrease of 1.25 per cent points when compared to the July 2024 headline inflation rate.

On a year-on-year basis, the headline inflation rate was 6.35 per cent points higher compared to the rate recorded in August 2023 (25.80 per cent).

“This shows that the headline inflation rate (year-on-year basis) increased in August 2024 when compared to the same month in the preceding year (i.e., August 2023),” the NBS said.

The bureau also said on a month-on-month basis, the headline inflation rate in August 2024 was 2.22 per cent. This, it said, means that in August 2024, the rate of increase in the average price level is lower than the rate of increase in the average price level in July 2024.

According to the NBS, food inflation was 37.52 per cent in August 2024 as against 39.53 per cent recorded in July. It said on a year-on-year basis, it was 8.18 per cent points higher compared to the rate recorded in August 2023 (29.34 per cent).

The country’s food prices have been rising sharply in recent years, a situation that worsened in 2023 when President Bola Tinubu removed petrol subsidies and allowed the naira to float.

This shift has led to a steep increase in the cost of staple foods pushing many Nigerians further into poverty and heightening food insecurity.

The persistent surge in prices over the past year has led to the closure of several farms and businesses, with many agricultural producers scaling back their output due to insecurity and unpredictable weather conditions affecting rural areas.

In response, Mr Tinubu declared a state of emergency on food insecurity in July last year, aiming to combat rising food costs. Despite these efforts, food inflation has continued unabated.

In July, Mr Tinubu unveiled some proactive measures meant to address skyrocketing food prices in the country. Amongst it, is the decision to suspend duties, tariffs, and taxes on the importation of essential food items such as beans, wheat, and husked brown rice.

Details

In its inflation report Monday, the NBS said the contributions of items on the divisional year-on-year level to the increase in the headline index are “food & non-alcoholic beverages (16.65 per cent), housing, water, electricity, gas & other fuel (5.38 per cent), clothing & footwear (2.46 per cent), and transport (2.09 per cent).”

Others are “furnishings & household equipment & maintenance (1.62 per cent), education (1.27 per cent), health (0.97 per cent), miscellaneous goods & services (0.53 per cent), restaurant & hotels (0.39 per cent), alcoholic beverage, tobacco & kola (0.35 per cent), recreation & culture (0.22 per cent) and communication (0.22 per cent).”

The percentage change in the average Consumer Price Index (CPI) for the twelve months period ending August 2024 over the average of the CPI for the previous twelve months period was 31.26 per cent, showing 8.88 per cent increase compared to 22.38 per cent recorded in August 2023.

Food inflation

The NBS the rise in food inflation on a year-on-year basis was caused by increases in prices of the following items, bread, maize grains, guinea corn, etc (bread and cereals class), yam, irish potatoes, water yam, cassava yuber, etc (potatoes, yam & other tubers class), palm oil, vegetable, etc (oil & fats class) and ovaltine, milo, lipton, etc (coffee, tea & cocoa class).

On a month-on-month basis, according to the bureau, the food inflation rate in August 2024 was 2.37 per cent which shows a 0.10 per cent decrease compared to the rate recorded in July 2024 (2.47 per cent).

“The fall can be attributed to the decline in the rate of increase in the average prices of tobacco, tea, coco, coffee, groundnut oil, milk, yam, irish potatoes, water yam, cassava tuber, palm oil, vegetable etc.

“The average annual rate of Food inflation for the twelve months ending August 2024 over the previous twelve-month average was 36.99 per cent, which was 11.98 per cent points increase from the average annual rate of change recorded in August 2023 (25.01 per cent),” the report said.