Inflation in Nigeria rose to 21.47 percent in November from 21.09 percent in October, accelerating for the 10th straight month as food prices surged, the National Bureau of Statistics (NBS) said on Thursday.
The NBS attributed the rise to a sharp increase in demand ahead of the Christmas season, import cost hikes due to the depreciation of the Naira, and a rise in production costs.
The consumer price index (CPI) measures the monthly change in prices paid by Nigerian consumers, and the NBS calculates the CPI as a weighted average of the prices of a basket of goods and services representing aggregate Nigerian consumption spending.
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The CPI is one of the most used measures of the inflation rate, and the inflation rate measures the relative change in CPI between periods, usually reported on a year-on-year basis (annual inflation) and a month-on-month basis (monthly inflation).
According to the NBS, the “All-item Index (Headline Inflation rate) in November 2022 on a year-on-year basis, stood at 21.47%. This was 6.07% points higher compared to the rate recorded in November 2021, which was (15.40%)”.
This shows that the headline inflation rate increased in November 2022 when compared to the same month in the preceding year (i.e., November 2021) by 6.07 percent.
“The increase in the general price level in the annual inflation rate (Year-on-Year) can be attributed to an increase in the cost of importation due to the continual currency depreciation and a General increase in the cost of production due to a surge in energy cost”, the NBS explained.
However, on a month-on-month basis, the Headline inflation rate in November 2022 was 1.39 percent, which was 0.15 percent higher than the 1.24 percent recorded in October 2022.
The increase in the monthly inflation rate (month-on-month basis) is attributed to higher demand, usually experience during the festive season.
The NBS stated that the percentage change in the average CPI for the 12 months ending November 2022 over the average of the CPI for the previous 12 months period was 18.37 percent, showing a 1.39 percent increase compared to the 16.98 percent recorded in November 2021.
It added that the components that made up the food sub-index in November 2022 2022 was 24.13 percent on a year-on-year basis; which was 6.92 percent higher compared to 17.21 percent recorded in November 2021.
The NBS stated that the rise in the food sub-index was caused by the increases in prices of Bread and cereals, Oil and fat, Potatoes, yam and other tubers, Food products n.e.c, and fish.
“Whereas the month-on-month food inflation rate in November was 1.40 percent, this was 0.17 percent higher compared to the rate recorded in October 2022 (1.23%). The increase was attributed to an increase in prices of some food items like Oil and fat, Fruits, Fish and Tubers.
“The average annual rate of food inflation for the twelve-month ending November 2022 was 20.41 percent. This is 0.21 percent points decline from the annual rate of change recorded in November 2021 (20.62%).
“The Core Inflation rate, that is all-items index less farm produce, which excludes the prices of volatile agricultural produce stood at 18.24 percent in November 2022 on a year-on-year basis; showing a rise of 4.39 percent when compared to 13.85 percent recorded in November 2021.
“On a month-on-month basis, the core inflation rate was 1.67 percent in November 2022, while the rate was 0.93 percent in October 2022. This shows a rise of 0.74 percent. The highest increases were recorded in prices of Gas, Liquid fuel, Passenger transport by Air, vehicle spare parts, and Solid fuel”, the NBS further stated.
The percentage change in the average CPI for the 12 months ending November 2022 was 15.69 percent, which was 2.73 percent points higher than the previous 12 months period which recorded 12.96 percent in November 2021.
The urban consumers’ inflation rate for November 2022 on a year-on-year basis stood at 22.09 percent, indicating 6.17 percent higher compared to the 15.92 percent recorded in November 2021, while on a month-on-month basis, the urban inflation rate was 1.50 percent in November 2022, showing 0.16 percent higher compared to 1.33 percent recorded in October 2022.
The corresponding 12 month average for the urban inflation rate was 18.90 percent in November 2022; this was 1.35 percent higher compared to the 17.55 percent reported in November 2021.
The inflation rate for rural consumers in November 2022 was 20.88 percent on a year-on-year basis; this was 5.99 percent higher compared to 14.89 percent recorded in November 2021.
On a month-on-month basis, the rural inflation rate in November 2022 was 1.30 percent, indicating a rise of 0.14 percent compared to 1.16 percent in October 2022, while the corresponding 12 months average for the rural inflation rate in November 2022 was 17.88 percent, indicating 1.46 percent higher compared to the 16.42 percent recorded in November 2021.
In comparing the states’ profiles, all-item inflation rates for November 2022 on a year-on-year basis were highest in Ebonyi, which had 26.11 percent, Kogi recorded 25.84 percent, Rivers had 24.45 percent, while Kaduna recorded 18.87 percent, Sokoto and Cross river recorded the slowest rise in inflation rate of 19.02 percent and 19.17 percent respectively.
However, on a month-on-month basis in November 2022 the highest increases were recorded in Ebonyi with 3.16 percent, Niger had 2.70 percent, Plateau recorded 2.44 percent, while Ogun had -0.17 percent, Abuja recorded -0.12 percent and Sokoto wuth 0.25 percent, the slowest rise on month-on-month inflation.
The Federal Government expects inflation to remain in double digits, averaging 17.16 percent next year, while analysts have said that persistent inflationary pressures are structural and largely imported.
