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Nigeria Inflation Races Past 20% in August 2022 – The Highest in 17 Years

This is the highest inflation rate since September 2005 when it was close to 24.32%.

The Nigerian headline inflation rate was 20.52% in August 2022, the National Bureau of Statistics of Nigeria (NBS Nigeria) has announced.

This was 3.52% points higher compared to the rate recorded in August 2021, which was (17.01%).

On a month-on-month basis, the headline inflation rate in August 2022 was 1.77%, 0.05% lower than the rate recorded in July 2022 (1.82%).

The last time Nigeria’s inflation was above 20% was in September 2005 when it rose to 24.32%.

The latest rate is more than twice the upper limit the Central Bank of Nigeria (CBN) has placed for inflation, with NBS blaming a worsening economic environment.

The Bureau identified these 3 reasons as causes for a persistent rise in inflation in the last 12 months:

  • Disruption in the supply of food products
  • Increase in import cost due to the persistent currency depreciation
  • A general increase in the cost of production

Inflation for the 12 months period ending August 2022 was 17.07%, showing a 0.47% increase compared to 16.60% recorded in August 2021.

The food inflation rate in August 2022 was 23.12 % on a year-on-year basis – 2.82% higher compared to the rate recorded in August 2021 (20.30%).

This rise in food inflation was caused by increases in prices of food items such as bread and cereals, potatoes, yams, and other tubers as well as fish, meat, oil and fat.

The core inflation, which is calculated from the prices of all items excluding the prices of volatile agricultural produce, stood at 17.20% in August 2022 on a year-on-year basis – up by 3.79% when compared to 13.41% recorded in August 2021.

The highest increases were recorded in prices of gas, liquid fuel, solid fuel, passenger transport by road, and passenger transport by air. Fuel and lubricants for personal transport equipment, cleaning, repair and hire of clothing also recorded increases.

CBN, which has already increased interest rates by 250 basis points to 14% since May 2022, is facing pressure to announce a further rates hike.

 

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