Nigeria Inflation for August 2022

The inflation rate in Nigeria witnessed yet another upsurge in the month of August 2022. The year-on-year headline inflation rate rose to 20.52 per cent, this surpassed the 19.64 and 17.01 per cent recorded in July 2022 and August 2021 by 0.88 and 3.52 per cent respectively, indicating that the general price level was higher by 0.88 and 3.52 per cent than what obtained in the months of July 2022 and August 2011 respectively. On the month-on-month basis, the headline inflation declined from 1.82 per cent recorded in July, to 1.77 per cent in August 2022. This shows a drop in the general price level of 0.05 per cent in the month of August. The decline in the monthly inflation rate was a function of the decrease in food prices due to harvest season which reduced the scarcity of food items witnessed in the previous months.

Nigeria Inflation for August 2022

The inflation rate in Nigeria witnessed yet another upsurge in the month of August 2022. The year-on-year headline inflation rate rose to 20.52 per cent, this surpassed the 19.64 and 17.01 per cent recorded in July 2022 and August 2021 by 0.88 and 3.52 per cent respectively, indicating that the general price level was higher by 0.88 and 3.52 per cent than what obtained in the months of July 2022 and August 2011 respectively. On the month-on-month basis, the headline inflation declined from 1.82 per cent recorded in July, to 1.77 per cent in August 2022. This shows a drop in the general price level of 0.05 per cent in the month of August. The decline in the monthly inflation rate was a function of the decrease in food prices due to harvest season which reduced the scarcity of food items witnessed in the previous months. On the other hand, the increase in the yearly headline inflation rate is attributed to the disruption in the supply of food products, increase in the cost of importation arising from the persistent currency depreciation and the general increase in the cost of production.

  

In both the urban and the rural areas, there were increases in the headline inflation rate in the month of August. The urban centre recorded a 20.95 percent inflation rate in year-on-year inflation, while the rural area was 20.12 per cent. The above figures show that the general price level increase by 3.36 per cent from the 17.59 per cent recorded in the same month in 2021 in the urban areas, while the rural areas presented an appreciation of 3.69 per cent in the general price level from the 16.43 per cent inflation rate recorded in the rural areas in the same month in 2021. On a month-on-month basis, the urban centre headline inflation declined by 0.03 percent from 1.82 per cent recorded in the month of July to 1.79 per cent in the month under review. Similarly, the rural areas also witnessed a decline in the month-on-month inflation rate from 1.81 per cent recorded in July to 1.75 per cent in August 2022. This shows that the general price level declined by 0.06 per cent.

 

The decline in the month-on-month inflation as stated above is attributed to the decline in food inflation given the harvest season. According to the National Bureau of Statistics (NBS), the reduction in prices of some food items like tubers, garri, local rice and Vegetables, etc., caused the food inflation to drop from 2.04 per cent in July to 1.98 per cent in August 2022. This was not the case with the year-on-year food inflation which rose from 20.30 per cent in August to 23.12 per cent in the month under review. The 2.82 per cent rise in the headline inflation within the period is attributed to increases in the prices of bread and cereals, food product, potatoes, yam and other tuber, fish, meat, oil and fat.

 

The core inflation rate, which excludes the prices of volatile agricultural produce, also recorded increases. On a year-on-year basis, the increases in the prices of Gas, Liquid fuel, Solid fuel, Passenger transport by road, Passenger transport by Air, fuel and lubricants for personal transport equipment, Cleaning, Repair and Hire of clothing caused a significant increase in inflation rate from o 13.41 per cent in August 2021 to 17.20 per cent in the same month in 2022. On a month-on-month basis, the core inflation rate was 1.59 per cent in August 2022. This shows that the prices of items under the core inflation reduced by 0.17 per cent when compared to 1.75 per cent recorded in July 2022.

 

However, the reduction in the rate of increase in inflation could not impact the price of other products, hence total inflation also increased. The rate of inflation in Nigeria has assumed an alarming dimension. There is no month past without an increase in the rate of inflation. This increase in inflation is eroding the purchasing power of consumers, and this eventually would affect their ability to purchase as well as the sales and revenue of manufacturers. It is important that while manufacturers rethink the sources of their raw materials locally, they also should resize their products to packages that are affordable to consumers.