Nigeria’s inflation rate rose by 12.82 per cent (year-on-year) in July, compared to 12.56 per cent recorded in June 2020. This is the highest rate recorded in 27 months since March 2018 when headline inflation was 13.34.
The report also shows that Nigeria’s inflation has consistently increased for 11-months, rising from 11.02 per cent in August 2019 to 12.82 per cent in July 2020.
On a month-on-month basis, the Headline index increased by 1.25 per cent in July 2020 which is 0.04 percentage points higher than the 1.21 per cent recorded in June 2020.
The NBS said the urban inflation rate increased by 13.40 per cent year-on-year in July 2020 from 13.18 per cent recorded in June 2020, while the rural inflation rate increased by 12.28 per cent in July 2020 from 11.99 per cent in June 2020.
On a month-on-month basis, the urban index rose by 1.27 per cent in July 2020, up by 0.04 from 1.23 per cent recorded in June 2020, while the rural index also rose by 1.23 per cent in July 2020, up by 0.04 from the rate recorded in June 2020.
The report stated that the composite food index rose by 15.48 per cent in July 2020 compared to 15.18 per cent in June 2020.
The rise in the food index, NBS said, was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fruits, oils and fats, and fish.
On a month-on-month basis, the food sub-index increased by 1.52 per cent in July 2020, up by 0.04 per cent points from 1.48 per cent recorded in June 2020.
The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 10.10per cent in July 2020, down by 0.03 per cent when compared with 10.13 per cent recorded in June 2020.
“The highest increases were recorded in prices of Medical services, Passenger transport by air, Pharmaceutical products, Hospital services, Passenger transport by road, Maintenance and repair of personal transport equipment, Paramedical services, and Vehicle spare parts,” the report read in part.
In July 2020, according to the NBS, all items inflation on year on year basis was highest in Bauchi (16.10 per cent), followed by Kogi State (15.90 per cent), Sokoto and Plateau (15.20 per cent), and Ebonyi State with 15 per cent. On the other hand Lagos (10.70 per cent), Adamawa (10.60 per cent), and Kwara (10.50 per cent) recorded the slowest rise in headline Year on Year inflation.
In terms of food inflation on a year on year basis, Kogi State (20.09 per cent) recorded the highest followed by Sokoto (19.28per cent and Plateau (18.05 per cent), while Adamawa (13.37 per cent), Abia (13.33 per cent), and Lagos (13.13 per cent) recorded the slowest rise.
An increase in inflation rate means that fixed income individuals have less purchasing power and their ability to afford the same quantity of goods and services has reduced significantly.
The International Monetary Fund (IMF) has made an estimate that Nigeria’s GDP is going to shrink for as much as 5.4 percent due to the economic lockdown that the world is going through due to the novel coronavirus pandemic. The virus has caused countries to lockdown their borders limiting traveling and hitting some core industries like tourism, hotels, and restaurants, airlines, etc. The companies are taking huge losses and some developing countries are suffering the most due to the fact that they have to rely on foreign loans which will ultimately drive the country into a bigger economic recession in time. The restrictions have also contributed to the increase in food prices which is the main cause of inflation.
Nigeria’s inflation rate