17 March 2020 : Nigeria’s inflation rate skyrockets, climbing up 0.07% higher than the value recorded in Jan 2020, to reach 12.20% in Feb 2020.

The inflation rate reaching its peak in almost two years is mainly because of the constantly increasing food-inflation sub-index, so essentially due to increase in prices of Bread and Cereals, Fish, Meat, Vegetables, and Oils and fats.

In the consumer price index (CPI) report, Nigerian Bureau of Statistics (NBS) stated that "Increases were recorded in all Classification of Individual Consumption According to Purpose (COICOP) divisions that yielded the Headline index.” “On a month-on-month basis, the Headline index increased by 0.79% in February 2020. This is 0.08 percent rate lower than the rate recorded in January 2020 (0.87%),”.

Key highlights from the February 2020 Nigeria’s inflation figures:

1) Categorically, the food inflation rose by 14.90% in February 2020 compared to 14.85% in January 2020.

2) The food sub-index grew to 13.98%, 0.12% points from the average annual rate of change recorded in January 2020 (13.86%).

3) The food sub-index escalated by 0.87% in February 2020, down by 0.12% points from 0.99% recorded in January 2020.  

4) Core inflation advanced by 8 bps to 9.43 % YoY (January 2020: 9.35% YoY)

5) Urban inflation rocketed by 7 bps to 12.85% year-on-year. Similarly, Rural inflation climbed by 6 bps 11.61% year-on-year.

The maddening increase in inflation reduces the purchasing power of fixed income minimum wage workers , thus making it more difficult for them to buy the day-to day items.

The ripple effect of this is that CBN will be forced to increase the country's interest rate in order to cushion the spike in the short run, thus putting pressure on the loan facility.

Analysts expect Naira devaluations and supply chain disruptions with trade partners to impact domestic consumer prices even more in the coming months thanks to the global epidemic COVID-19

Reporting for EasyKobo on Tuesday , 17 March 2020 in Lagos, Nigeria