Inflation Hits 13.71%, as Prof Uwaleke Reacts

Prof Uche Uwaleke

By Tony Obiechina, Abuja

The consumer price index, (CPI) known as inflation increased higher by 0.49 percent point to steady at 13.71 percent in September , against August figure of 13.22 percent, National Bureau of Statistics ( NBS) confirmed Thursday in monthly inflation report.

The report said Increases were recorded in all  divisions that yielded headline index.  On a month-on-month basis, headline index increased by 1.48 percent in September 2020, indicating  0.14 percent rate higher than the rate recorded in August 2020 (1.34) percent. 

Food index rose by 16.66 percent in September 2020 compared to 16.00 percent in August 2020. 
“This 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”. 
“On month-on-month basis, the food sub-index increased by 1.88 percent in September 2020, up by 0.21 percent points from 1.67 percent recorded in August 2020. The average annual rate of change of the food sub-index for the twelve-month period ending September 2020 over the previous twelve-month average was 15.13 percent, 0.26 percent points from the average annual rate of change recorded in August 2020 (14.87 percent)”.

The percentage change in the average composite CPI for the twelve months period ending September 2020 over the average of the CPI for the previous twelve months period was 12.44 percent, showing 0.21 percent point from 12.23 percent recorded in August 2020.
The urban inflation rate increased by 14.31 percent (year-on-year) in September 2020 from 13.83 percent recorded in August 2020, while the rural inflation rate increased by 13.14 percent in September 2020 from 12.65 percent in August 2020.

“The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural 
produce stood at 10.58 percent in September 2020, up by 0.06 percent when compared with 10.52 percent recorded in August 2020″. 
“On month-on-month basis, the core sub-index increased by 0.94 percent in September 2020. This was down by 0.11 percent when compared with 1.05 percent 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”

Inflation varies at sub- national level. All items inflationIn September 2020,  on year on year basis was highest in Bauchi (17.85%), Zamfara (17.42%) and Kogi (16.66%), while Lagos (11.19%), Abuja (10.59%) and Kwara (10.53%) recorded the slowest rise in headline Year on Year inflation.
On month on month basis however, September 2020 all items inflation was highest in Bauchi (3.36%), Kogi (2.63%) and zamfara (2.75%), while Nasarawa (0.66%), Abuja (0.64%) and Ondo (0.31%) recorded the slowest rise in headline month on month inflation.

Similarly,  food inflation in month under review (September  on a year on year basis ) was highest in Zamfara (20.94%),Kogi (19.06%) and Plateau/Yobe (18.90%), while Nasarawa (13.94%), Lagos(13.87%) and ondo (13.59%) recorded the slowest rise.
“On month on month basis however, September 2020 food inflation was highest in Zamfara (3.65%), Anambra (3.19%) and Kaduna (3.15%), while Nasarawa (0.51%) and Abuja (0.15%) recorded the slowest rise with Ondo recording price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate)”, NBS report said.

Reacting to the report, Prof Uche Uwaleke said the uptrend in headline inflation is expected. 

According to him, “It is the immediate outcome of the increase in the pump price of fuel, the Value Added Tax, electricity tariffs as well as the implementation of stamp duties and the continuous border closure”.
He said further, “All these factors aggravated the legacy issues reflected in infrastructure deficit, especially power and transport, as well as illiquidity in the forex market and insecurity.

“It is also not a surprise that food inflation is exerting the most pressure, rising by as high as 16.6% in September, owing to supply shortages from the lingering effects of COVID’19 and insecurity challenges in some food producing areas of the country.
“As a matter of fact, insecurity situation in states like Zamfara and Katsina is contributing to the inflationary pressure from reduced food output.
“It is no surprise therefore that Bauchi and Zamfara recorded the highest inflation rates while relatively safe areas like Lagos and Abuja had the least numbers. The harvest season may not significantly rein-in inflation except issues of  insecurity and forex pressure is addressed.

 “Also, the interventions in the Agriculture sector by the CBN needs to be monitored to ensure that the funds are used for the purposes meant. There is equally the need to speed up the implementation of the mass Agriculture program in the government’s Economic Sustainability Plan”.

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