Inflation rate surged by almost 100 basis points (bps) to 20.52 per cent in August 2022, according to the report of the National Bureau of Statistics (NBS) released on Thursday.
The NBS attributed the increase in the annual inflation rate to three factors. Disruption in the supply of food products, increase in import cost due to the persistent currency depreciation and the general increase in the cost of production.
Inflation rate was 19.64 per cent in the previous month of July.
The consumer price index (CPI) measures the average change over time in the prices of goods and services consumed by people for day-to-day living.
NBS stated that the August 2022 inflation rate of 20.52 per cent was 3.52 per cent points higher compared to the rate recorded in August 2021, which was (17.01 per cent).
It said: “This shows that the headline inflation rate increased in the month of August 2022 when compared to the same month in the preceding year (i.e. August 2021). Meaning that in August 2022, the general price level was 3.52 per cent higher relative to August 2021.
On a month -on-month basis, the urban inflation
rate was 1.79 per cent in August 2022, this was a 0.03 per cent decline compared to July 2022 (1.82 per cent).
The corresponding twelve-month average for the urban inflation rate was 17.59 per cent in August 2022. This was 0.4% higher compared to 17.19 per cent reported in August 2021.
The rural inflation rate in August 2022 was 20.12 per cent on a year-on-year basis. This was 3.69 per cent higher compared to 16.43 per cent recorded in August 2021.
On a month-on-month basis, the rural inflation rate in August 2022 was 1.75 per cent, down by 0.06 per cent compared to July 2022 (1.81 per cent). The corresponding twelve-month average for the rural inflation rate in August 2022 was 16.58 per cent. This was 0.55 per cent higher compared to 16.03 per cent recorded in August 2021.
In a chat with Blueprint, Capital Market Professor, Uche Uwaleke, said that the headline inflation did not come as a surprise due to rising global inflation occasioned by the Russia-Ukraine war.
“The increase in headline inflation above the psychological threshold of 20% did not come as a surprise in view of the rising inflation trend in many economies partly caused by the Russian Ukrainian conflict.
“It’s interesting to note that the NBS, in its latest CPI report, provided a clue as to the major factors driving the inflationary pressure in Nigeria namely supply disruptions and rising cost of production,” he said.
In the report, NBS had said that disruption in the supply of food products; increase in import cost due to the persistent currency depreciation and general increase in the cost of production was responsible for increase in the increase in rates.
While noting that the recent CBN policy tightening has not yielded the desired result, Uwaleke said the needs to come up with policies that will boost local food production.
“In the light of this revelation, what becomes clear is that the recent monetary policy tightening stance of the CBN alone may not address the challenge.
The government needs to formulate and implement complementary fiscal policies aimed at boosting food supply as well as reducing firm’s cost of production,” he added.
