Index to Nigerian Newspapers

Nigeria’s annual inflation rate rose to 24.08 per cent in July, the highest in 18 years, driven by higher prices of food items, increased transport fares, reflecting the increasing struggle of households to meet daily feeding needs, worsened by the impact of fuel subsidy removal and continued depreciation of the naira.

As a result, food inflation rose to 26.98 per cent, the highest level in 18 years, since September 2005.

Also reflecting the impact of fuel subsidy removal on cost of transportation and related services, core inflation (all items less farm produce and energy), rose to 20.47 per cent in July, the highest in 19 years, up by 0.41 percentage points from 20.06 per cent in June.

Disclosing this in its Consumer Price Index report for August, the National Bureau of Statistics, said that increases in prices of food and non-alcoholic beverages were responsible for most (12.47 per cent) of the rise in the headline inflation rate to 24.08 per cent in July, followed by housing water, electricity, gas & other fuel (4.03 per cent); clothing and footwear (1.84 per cent); transport (1.57 per cent); furnishings, household equipment and maintenance (1.21 per cent).

These, he said include weakening of purchasing power of citizens as real incomes are eroded, thus aggravating poverty incidence; escalating production costs which negatively impacts profitability; rrosion of shareholder value in many businesses; weakening of investors’ confidence; and declines in manufacturing capacity utilization as a consequence of weakening sales and erosion of profit margins”

“This translates to lower demand for fuel, depicting reduced movement of individuals and food items. Despite the anticipated operations of local refineries and the President’s 500,000 hectares ‘farmland plan’, our inflation expectations for the ensuing months remain dreary.

‘’Factors like further flood fears in Southern Nigeria, speculative price hikes in pump prices, continued depreciation of the naira and sustained dependency on imports impel our expectations.”