The soaring prices of bread, fish, eggs and other essential food items have pushed Nigeria’s headline inflation to a new 18-year high, worsening the cost-of-living crisis facing many households.
Data released by the National Bureau of Statistics (NBS) on Wednesday show that the inflation rate, which was largely driven by food prices, quickened in October for the 10th consecutive month.
It rose to 27.33 percent from 26.72 percent in the previous month, according to the Consumer Price Index (CPI), which measures changes in prices of goods and services.
The CPI report shows that food and non-alcoholic beverages contributed the most (14.16 percent) to the increase in the headline inflation.
Food inflation rose to 31.52 percent in October from 30.64 percent in the previous month.
“The rise in food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, potatoes, yam and other tubers, fish, fruit, meat, vegetables, milk, cheese, and eggs,” the NBS said.
Flour and sugar, which are major components of bread, were among the commodities that recorded the highest price increases, analysts at Financial Derivatives Company Limited (FDC), led by economist Bismarck Rewane, said in their latest economic bulletin.
“The price of flour has spiked by 46.88 percent to N47,000 per 50kg bag from N32,000 a year ago,” they said.
They said the prices of locally produced commodities have remained on an upward trend despite the harvest season (October-December) “largely because of higher logistics costs, poor road infrastructure, and other logistics constraints”.
“Disturbingly, inflation continues to bite, retarding growth and eroding consumer disposable income,” the FDC analysts said.
David Omojomolo, Africa economist at London-based Capital Economics, said the rise in the headline rate was driven largely by higher food prices.
On a month-on-month basis, the food inflation rate in October 2023 was 1.91 percent, down from 2.45 percent in the previous month. This means that food inflation increased in October at a slower pace.
Analysts at Cordros Research attributed the moderation in food inflation to the seasonal increase in food supplies in line with the main harvest season, as the harvested food crops reach both the rural and urban markets.
They added that the decline in global food prices had started to filter into domestic food prices.
They said: “We expect the main harvest season to have a feed-through impact in improving food supplies in November, albeit not large enough to temper food prices relative to the prior year significantly. Notably, we expect a limited and below-average increase in food supplies as we understand that the prolonged dry spells during the planting season in the North, delays in the onset of rainfall and increased levels of banditry and kidnapping to have likely limited the increase in food supplies from the primary harvest season.
“In addition, we anticipate an increase in the demand for food produce ahead of the festive period in December amid still-high transport costs. Consequently, we forecast a 1.87 percent m/m increase in food prices in November, translating to 32.13 percent y/y.”
The core inflation, which excludes the prices of volatile agricultural produce, rose to 22.58 percent in October from 21.84 percent in the previous month.
The rising prices of food and other goods and services are putting a strain on consumers’ budgets and making it increasingly difficult for many to afford basic necessities.
A recent survey by SBM Intelligence found that Nigerians said they were spending 97 percent of their monthly income on food.
Business Day
