*** Declines sharply amid CBN tightening
By Tony Obiechina, Abuja
Nigeria’s headline inflation rate for October 2023 has risen to 27.33 percent, the National Bureau of Statistics (NBS) disclosed on Wednesday.
The figure is 0.9 short of the 28.2 percent recorded 18 years ago, in August 2005.
The NBS in a report released on Wednesday said, on a year-on-year basis, the headline inflation rate was 6.24 points points higher compared to the rate recorded in October 2022, which was (21.09 percent).
“The increase in the headline index for October 2023 was attributed to the increase in some items in the basket of goods and services at the divisional level.
“These increases were observed in Food and non-alcoholic Beverages (14.16%), Housing, Water, Electricity, Gas & other Fuel (4.57%), Clothing & Footwear (2.09%), Transport (1.78%), Furnishings & Household Equipment and maintenance (1.37%), Education (1.08%) and Health (0.82%).
“Others are Miscellaneous Goods & Services (0.45%), Restaurants & Hotels (0.33%), Alcoholic Beverages, Tobacco & Kola (0.30%), Recreation & Culture (0.19%) and Communication (0.19).”
The report also said food sub-index for October 2023 increased to 31.52% on a year-on-year basis, which was 7.80% points higher compared to the rate recorded in October 2022 (23.72%).
According to the report, the rise in food inflation was due to increases in prices of bread & cereals, oil & fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables and milk, cheese, and eggs.
“However, on a month-on-month basis, the Food inflation rate in October 2023 was 1.91%. This was 0.54% lower compared to the rate recorded in September 2023 (2.45%).
“The decline in food inflation was caused by a decrease in the average prices of Fruits, oil and fat, coffee, tea and cocoa, bread and cereals”, it added.
… Nigeria’s inflation declines sharply amid CBN tightening
Meanwhile, Nigeria’s headline inflation rate, on a month-on-month basis, in October 2023, stood at 1.73%, 0.37% lower than the rate recorded in September 2023.
In a chat with newsmen in Abuja, on Wednesday, November 15, 2023, on the latest NBS figures, the spokesman of the Central Bank of Nigeria (CBN), Dr. Isa AbdulMumin, expressed optimism that the low rate of increase in the average price level in October compared to September 2023, was a pointer to the fact that the Bank’s monetary policy stance to tighten rates and its money market reforms were yielding the desired effect.
Aggressive monetary tightening using various liquidity mechanisms including removing the cap on the Standing Deposit Facility (SDF) and Open Market Operations had raised Open Buy Back (OBB) rates from less than 1% in August to their expected levels around the monetary policy rate today
In spite of 0.61% increase in the headline inflation rate from 26.72% in September 2023 to 27.33% in October 2023, Isa remained upbeat that the CBN was headed in the desired direction in terms of achieving price stability.
According to him, available statistics showed that the first indication of deceleration in prices was recorded in September and further reforms in the money market, which commenced in October, had accelerated easing in prices as indicated by the substantial drop in month-on-month changes recorded in October.
“Moderation in month-on-month changes in prices observed in the headline, food and core components of the consumer basket followed reforms in the money market and relative stability in the FX market,” he added.