Nigeria’s consumer inflation surged to a 17-year high at 20.5% in August 2022, according to the latest report by released Thursday by the National Bureau of Statistics (NBS).
The Consumer Price Index (CPI) which measures inflationary trends in the country showed that inflation rose to 20.5% in August, up from 19.6% in July this year and 17% in August last year, thus signalling more hardship for citizens and businesses in Africa’s largest economy.
Business Metrics recalls that it is the seventh consecutive monthly increase in Nigeria’s inflation this year and the highest since 2005.
All Items Index
In August 2022, on a year –on- year basis, the headline inflation rate was 20.52%. This was 3.52% points higher compared to the rate recorded in August 2021, which was (17.01%).
This shows that the headline inflation rate increased in the month of August 2022 when compared to the same month in the preceding year (i.e.August 2021). Meaning that in August 2022, the general price level was 3.52% higher relative to August 2021.
On a month-on-month basis, the Headline inflation rate in August 2022 was 1.77%, this was 0.05% lower than the rate recorded in July 2022 (1.82%).
This means that in August 2022 the headline inflation rate (month–on–month basis) declined by 0.05%. The percentage change in the average CPI for the twelve months period ending August 2022 over the average of the CPI for the previous twelve months period was 17.07%, showing a 0.47% increase compared to 16.60% recorded in August 2021.
The Increases were recorded in all Classification of individual consumption by purpose (COICOP) divisions that yielded the Headline index.
Likely factors responsible for the decline in the monthly inflation rate include decline in current month food index relative to the reference month index which is due to harvest season; and relative stability in transportation cost due to availability of fuel.
On the other hand, likely factors responsible for the increase in annual inflation Rate are disruption in the supply of food products; increase in import cost due to the persistent currency depreciation; and general increase in the cost of production.
Food Price Remains above Average Rate
Again, prices of food items remained a major concern during the month under review as food inflation spike at 23.12 % on a year-on-year basis; which was 2.82% higher compared to the rate recorded in August 2021 (20.30%)
Specifically, this rise in the food inflation was caused by increases in prices of bread and cereals, food product, potatoes, yam and other tuber, fish, meat, oil and fat.
On a month-on-month basis, the food inflation rate in August was 1.98%, this was a 0.07% decline compared to the rate recorded in July 2022 (2.04%). This decline is attributed to reduction in prices of some food items like Tubers, Garri, local rice and Vegetables.
The average annual rate of food inflation for the twelve-month period ending August 2022 over the previous twelve-month average was 19.02%, which was a 1.48% decline from the average annual rate of change recorded in August 2021 (20.50%).
On a year-on-year basis, in August 2022, the urban inflation rate was 20.95 %, this was 3.36% higher compared to 17.59 % recorded in August 2021. On a month -on-month basis, the urban inflation rate was 1.79% in August 2022, this was a 0.03 % decline compared to July 2022 (1.82%).
The corresponding twelve-month average for the urban inflation rate was 17.59 % in August 2022. This was 0.4% higher compared to 17.19% reported in August 2021.
The rural inflation rate in August 2022 was 20.12% on a year-on-year basis; this was 3.69% higher compared to 16.43% recorded in August 2021. On a month-on-month basis, the rural inflation rate in August 2022 was 1.75%, down by 0.06% compared to July 2022 (1.81%).
The corresponding twelve-month average for the rural inflation rate in August 2022 was 16.58%. This was 0.55% higher compared to 16.03% recorded in August 2021.