Inflation Soars to 33.69% Amid Higher Food, Energy, Commodity Prices

•Severe in Borno, Bauchi, Oyo, others  

•Food index hits 40.53% 

•CPPE urges MPC to soften monetary tightening

James Emejo in Abuja and Dike Onwuamaeze in Lagos

The Consumer Price Index (CPI) which measures the rate of change in prices of goods and commodity further increased to 33.69 per cent in April compared to 33.20 per cent in the preceding month, the National Bureau of Statistics (NBS) disclosed yesterday.

Year-on-year, the headline index stood at 33.69 per cent compared to 22.22 per cent recorded in April 2023.

According to the CPI report for the month the food index stood at 40.53 per cent, year-on-year, representing 15.92 per cent increase compared to 24.61 per cent in April last year.

Core inflation, including energy prices rose by 6.87 per cent, year-on-year to 26.84 per cent in the review period compared to 19.96 per cent in April 2023.

On annualised basis, the rise in food inflation was attributed to increases in prices of millet flour, garri, bread, wheat flour prepacked, semovita (which are under bread and cereals class), yam tuber, water yam, cocoyam (under potatoes, yam and other tubers class).

Other contributors to food inflation included coconut oil, palm kernel oil, vegetable oil, among others (under oil and fat), dried fish sardine, catfish dried, mudfish dried (under fish class), beef head, beef feet, liver, frozen chicken (under meat class), mongo, banana, grapefruit (under fruit class), lipton tea, bournvita, milo (under coffee, tea and cocoa class).

However, the NBS stated that month-on-month, food inflation declined by 1.11 per cent to 2.50 per cent in April compared to 3.62 per cent in March.

The statistical agency further explained that fall in the monthly food index was caused by a fall in the rate of increase in the average prices of yam, water yam, irish potatoes (under potatoes, yam and other tubers class), beer, local beer (under tobacco class), milo, bournvita, nescafe (under coffee, tea, and coco class), groundnut oil, palm oil (under oil and fats class), egg, fresh milk, powered milk, and tin milk (under milk, cheese, and eggs class).

Other were soft drinks e.g. malt guinness, coco-cola, spirit (local production), chelsea, seaman schnapps (under spirit class), wine and fruit e.g., water melon, pineapple, banana, pawpaw among others.

On the other hand, the increase in core inflation was blamed on highest increases in prices of actual and imputed rentals for housing, journey by motorcycle, bus journey within a city (under passenger transport by road class), consultation fee of a medical doctor, x-ray photography among others (under medical services class), and accommodation services.

Month-on-month, the core index reduced to 2.20 per cent in April from 2.54 per cent.

Also, urban inflation, year-on-year, rose to 36 per cent compared to the 23.39 per cent in April 2023 while the index dropped to 2.67 per cent month on month compared to 3.17 per cent in March.

Similarly, rural inflation rose to 31.64 per cent year-on-year compared to the 21.14 per cent in April 2023 while month-on-month, the index dropped to 1.92 per cent compared 2.87 per cent in March.

At states level, the all-items inflation year on year was highest in Kogi (40.84 per cent), Bauchi (39.91 per cent), Oyo (38.37 per cent), while Borno (26.09 per cent), Benue (27.53 per cent) and Taraba (28.69 per cent) recorded the slowest rise. Month-on- month, the index recorded highest increases in Lagos (4.52 per cent), Ondo (3.35 per cent), Edo (3.27per cent), while Kano (0.30 per cent), Ebonyi (0.97 per cent) and Adamawa (1.25 per cent) recorded the slowest movement.

On annualised basis, food inflation was highest in Kogi (48.62 per cent), Kwara (46.73 per cent), Ondo (45.87 per cent), while Adamawa (33.61 per cent), Bauchi (33.85 per cent) and Nasarawa (34.03 per cent), recorded the slowest rise. Month- on-month, food price was highest in Lagos (4.74 per cent), Edo (4.06 per cent), and Yobe (3.99 per cent), while Kano (0.47 per cent), Adamawa (0.98 per cent) and Zamfara (1.50 per cent) recorded the slowest rate of increase.

Reacting to the CPI report yesterday, the Chief Executive Officer of the Centre for the Protection of Private Enterprises (CPE), Dr. Muda Yusuf, urged the Monetary Policy Committee (MPC) to soften its monetary tightening.

Yusuf, however, noted that the persistent inflationary pressure in the Nigerian economy has remained a major cause for concern because of the implications for purchasing power and operating costs for businesses.

He said: “The good news however is the decline in the month on month inflation both for headline inflation and food inflation.   Meanwhile the key inflation drivers are yet to significantly moderate.”

 These key drivers, according to him, were the Naira exchange rate, transportation costs, logistics challenges, insecurity in farming communities and structural bottlenecks to production.

He said these were largely supply side issues which are being addressed by the fiscal authorities.

“Meanwhile the exchange rate benchmark for the computation of import duty continues to be a major concern to businesses as it has become a major inflation driver.

“We again urge the CBN to peg the rate at between N800 -N1000/dollar to be reviewed quarterly. This is necessary to reduce the pass through effect of heightening trade cost on inflation.

“The commencement of domestic refining of petroleum products by the Dangote Refinery is a remarkable upside for the economy. It is expected to have a considerable moderating effect on energy costs and inflation in the near term.”

Yusuf added: “Businesses are yet to recover from the shocks of the recent bullish rate hikes. The monetary instruments should be put on pause while fiscal policy tools address supply side factors in the inflation dynamics.”