Nigeria’s inflation rate has risen to 19.64 per cent in July, a level not seen in over one-and-a-half decade.
This was disclosed on Monday by the Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics (NBS), Prince Semiu Adeniran, when he released the Consumer Price Index (CPI) for July 2022 in Abuja.
Though experts insist the economy may still be going through the time lag required before the effect of monetary tightening measures is felt in decelerating inflation, others warned that the supply side factors driving inflation are still active, hence the future could be scarier.
Last month, the Monetary Policy Committee (MPC) increased the bench interest rate by 100 basis points to 14 per cent, the highest in recent memory. It had previously broken a two and half-year jinx by increasing the MPR with the same magnitude to rein in inflation. Still, the inflation rate continues to accelerate.
The last time the country witnessed or exceeded a 19 per cent headline inflation was 2005 when the figure spiked from a single digit in January of same year to a peak of 28.2 per cent in August.
In 2008, 2010, 2017 and last year, there were elevated inflation rates. But last month was the first time the country would record above 19 per cent year-on-year (YoY) change in the inflation level since 2005.
July YoY inflation was 2.26 percentage points higher than 17.38 per cent price change recorded exactly a year earlier. It was also over 100 basis points above June’s inflation, which was 18.6 per cent.
The inflation rate is higher than what some economists projected for the month.
According to the July CPI, a metric that measures changes in the general price level over time, the general prices were also 1.82 per cent higher than they were a month earlier.
Despite the start of the food harvest period, the food segment was not slowing down, as it spiraled to 22.03 per cent YoY as against 21.03 per cent a year earlier. Month-on-month inflation was 2.04 per cent.
As usual, there was a remarkable gap between food and core inflation, which was 16.26 per cent YoY. The difference between the two segments is almost six percentage points, underpinning the contribution of food to the country’s worrisome inflation growth.
Adeniran said the increase was caused by a surge in food index attributed to the disruption in the supply of food products. The statistician-general also said the increase in inflation was fueled by an increase in the cost of transportation arising from the higher cost of energy.
According to him, increase in import costs as a result of currency depreciation, as well as a general increase in the cost of production were also push factors.
Experts are not taken by surprise but had warned that inflation would remain elevated as long as the factors driving fast-rising prices are not addressed.