Moderation in Food Prices Eases Inflation to 32.15%

•Severe in Bauchi, Kebbi, Jigawa, others

Ndubuisi Francis, James Emejo in Abuja and Sylvester Idowu in Warri

The Consumer Price Index (CPI) which measures the rate of change in prices of goods and commodities declined to 32.15 percent in August compared to 33.40 percent in the preceding month, the National Bureau of Statistics (NBS) said yesterday.

The NBS attributed the 1.25 percent drop in the headline index to moderation in food and commodity prices.

According to the CPI figures for the review period, year-on-year, however, inflation was 6.35 percent higher compared to 25.80 percent in August 2023.

Month-on-month, headline inflation dropped to 2.22 percent compared to 2.28 percent in July.

Month-on-month, the food inflation stood at 2.37 percent or 0.10 percent decrease compared to 2.47 percent in the preceding month.

The NBS attributed the fall to the decline in the rate of increase in the average prices of tobacco, tea, cocoa, coffee, groundnut oil, milk, yam, irish potatoes, water yam, cassava tuber, palm oil, and vegetable among others.

However, food inflation stood at 37.52 percent, year-on-year, which represented an 8.18 percent increase compared to 29.34 percent in August 2023.

According to the statistical agency, the rise in food inflation on annualised basis was caused by increases in prices of bread, maize grains, guinea corn, etc (bread and cereals class), yam, irish potatoes, water yam, cassava tuber, (potatoes, yam and other tubers class).

Others are palm oil, vegetable, etc (oil & fats class) and ovaltine, milo, lipton, (coffee, tea and cocoa class), among others.

On the other hand, core inflation, which excludes the prices of volatile agricultural produce and energy stood at 27.58 percent, year on year, in August, up by 6.43 percent when compared to 21.15 percent in August 2023.

The highest increases in core inflation were recorded in prices of rents (actual and imputed rentals for housing class), bus journey intercity, journey by motorcycle, etc (under passenger transport by road class), and accommodation services.

Others include laboratory service, x-ray photography, consultation fee of a medical doctor, etc (under medical services class).

Month-on-month, core inflation increased to 2.27 percent in August 2024, compared to 2.16 percent in July.

Year-on-year, urban inflation increased to 34.58 percent, compared to 27.69 percent in August 2023, while month-on-month, the index stood at 2.39 percent compared to 2.46 percent in the preceding month.

Also, rural inflation increased to 29.95 percent, year-on-year compared to 24.10 percent in August 2023. Month-on-month,   the rural index stood at 2.06 percent, down by 0.04 per cent compared to 2.10 percent in July.

At the state level, the “All Items” inflation was highest in Bauchi (46.46 percent), Kebbi (37.51 percent), and Jigawa (37.43 percent), while Benue (25.13 percent), Delta (26.86 percent) and Imo (28.05 percent) recorded the slowest rise, year-on-year.

Month-on-month, however, the highest price increase was recorded in Kwara (4.45 percent), Bauchi (4.22 percent), Adamawa (3.99 percent), while Ogun (0.21 percent), Abuja (0.92 percent) and Kogi (1.14 percent) recorded the slowest rise.

Under the review period, food inflation, year-on-year was highest in Sokoto (46.98 per cent), Gombe (43.25 per cent), and Yobe (43.21 per cent) while Benue (32.33 per cent), Rivers (33.01 per cent) and Bayelsa (33.36 per cent), recorded the slowest rise.

Month- on-month, however, the food index was highest in Adamawa (5.46 per cent), Kebbi (4.48 per cent), and Borno (3.88 per cent), while Ogun (0.08 per cent), Akwa-Ibom (0.45 per cent) and Sokoto (1.00 per cent) recorded the slowest rise.

Meanwhile, a former Commissioner for Finance in Imo State and President of the Association of Capital Market Academics of Nigeria (ACMAN), Prof. Uche Uwaleke, has advised the federal government to resolve the current oil price controversy between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery to stem its negative impact on the general price level.

Uwaleke, who spoke against the backdrop of the latest inflation figures released by the National Bureau of Statistics (NBS) yesterday, noted that easing in the headline inflation rate was due chiefly to the moderation in food inflation occasioned by the harvest season.

According to the NBS, Headline inflation stood at 32.15 percent year-on-year (YOY) in August as against 33.40 per cent in July 2024.

Uwaleke, the Director, Institute of Capital Market Studies, Nasarawa State University, Keffi, noted that the easing in the headline inflation rate in August was due chiefly to the moderation in food inflation occasioned by the harvest season.

He explained that the drought reported in many parts of the north partly explained the high rate of food inflation in states like Sokoto and Kebbi.

He alluded to the increase in the core inflation rate in August, adding that the Central Bank of Nigeria should shift attention to how the fiscal authorities could be supported to boost food production.

“What all these points to is that it is time for the CBN to recognise the real pressure points and shift some attention to how the fiscal authorities can be supported to boost food production beginning with a halt in MPR (Monetary Policy Rate) hike this month.

“The federal government should intervene in the recent ‘oil price dispute’ between the NNPCL and Dangote Refinery to stem its negative impact on the general price level,” he recommended.

Also, former lawmaker representing Warri Federal Constituency, Hon. Daniel Reyenieju, called for NNPCL’s restructuring, saying the national oil has to start prioritising transparency, efficiency, and accountability.

Reyenieju, in a statement yesterday, said the NNPCL was capable of driving national growth, stressing that President Bola Ahmed Tinubu’s courageous initiative to reshape Nigeria’s future was commendable.

The former federal lawmaker acknowledged that the challenges facing the nation were significant but not insurmountable noting that decisive and courageous action and demonstrated visionary leadership were all required.

“Allowing entrenched personal interests to perpetuate the status quo will only hinder future leaders who will inherit a more complex landscape. “We must unite in support of President Tinubu’s efforts to implement comprehensive restructuring and deep reforms in the NNPCL that prioritises transparency, efficiency, and accountability”, he said.

Also the Chairman of DAS Energy Services Limited, Udu near Warri, Chief Sunny Onuesoke, called for the sack of the Group Managing Director of NNPCL, Mele Kyari over lingering dispute over petroleum pricing between the organisation and Dangote refinery.

Onuesoke, also in a statement issued yesterday, noted that the dilly dally game between NNPCL and Dangote refinery in the past few days over the pricing of PMS was bringing a bad image to the country and will discourage the needed foreign investments.