Nigeria’s inflation hits 12.13%, highest since April 2018

.Nigerians shouldn’t worry, it’s a temporary phenomenon, says Expert

For the first time in nearly two years, Nigeria’s inflation has reached an all time high of 12.13 per cent; the latest figure from the National Bureau of Statistics (NBS) has revealed.

The Consumer Price Index (CPI) which measures inflation increased by 12.13 per cent year-on-year in January 2020, the NBS stated this in its report on Inflation released on Tuesday.

The nation’s statistics office stated that the increase was 0.15 per cent points higher than 11.98 per cent rate recorded in December 2019.

The bureau explained that the increases were recorded in all Classification of Individual Consumption by Purposes (COICOP) divisions that yielded the headline index.

According to NBS, month-on-month basis, the headline index increased by 0.87 per cent in January 2020 and this is 0.02 per cent rate higher than the rate recorded in December 2019, which was 0.85 per cent.

“The percentage change in the average composite CPI for the 12 months period ending January 2020, over the average of the CPI for the previous 12 months period was 11.46 per cent, showing 0.06 per cent point from 11.40 per cent recorded in December 2019.

“The urban inflation rate increased from 12.62 per cent in December to 12.78 per cent year on year in January 2020, while the rural inflation rate increased from 11.41 per cent in December 2019 to 11.54 per cent in January 2020.

“On a month-on-month basis, the urban index rose from 0.90 per cent recorded in December 2019 to 0.92 per cent in January 2020, up by 0.02, while the rural index also rose by 0.83 per cent in January 2020, up by 0.01 from the rate recorded in December 2019, which was 0.82 per cent.

“The corresponding 12-month year-on-year average percentage change for the urban index is 11.92 per cent in January 2020. This is higher than 11.83 per cent reported in December 2019.

“While the corresponding rural inflation rate in January 2020 is 11.04 per cent compared to 11.00 per cent recorded in December 2019,” it explained.

The current border closure policy by the government to encourage local production has been seen as the chief reason driving the inflation upwards. A breakdown of Nigeria’s inflation rate since the border closure shows that the inflation rate in September released in October stood at 11.24 per cent, while the  October inflation rate released in November stood at 11.61 per cent.

Subsequently, November inflation figures released in December was at 11.85 per cent, just as December 2019 inflation rate released in January 2020 stood at 11.98 per cent.
Currently, the  January inflation rate as released yesterday now stands 12.13 per cent.

However, experts have allayed fears arising from the rising inflationary trends, saying it is a temporary phase which must be experienced for long term stability.

The President, National Association of Nigerian Traders Ken Ukaoha while speaking to The Daily Times said there is no reason for Nigerians to worry as inflation is a temporary issue and will take some time to stabilize.

He said inflation will move incrementally until it reaches a certain level, then it will maintain normalcy for the prosperity of the country.

“Few months into the border closure and local products are gradually displacing foreign goods especially consumables.

“The manufacturing and textile sectors are the ones left because you could see significant foreign materials but it will gradually reduce and our indigenes fashion designers will be all over to boost the sector positively,”

He disagreed that border closure is chiefly behind consumer price inflation, adding that those calling for a review of the border closure policy should be disregarded by the federal government.

“If nobody is producing what we consume, we will be increasing capital flight and the economy will be on a nosedive,” Ukaoha explained.