Nigeria’s inflation moderates to 9.3 percent

Nigeria’s inflation moderated 0.1 percentage point to 9.3 percent in October, after reaching a two year record high of 9.4 percent the previous month.

The National Bureau of Statistics said on Sunday that all indices which contribute to the index (including food and core) moved at a slower pace (month-on-month) in October with the exceptions being the Transport and Communications divisions.

In the past ten months, inflation had risen steadily, however slowly to 9.4 percent in September, rasing fears that it could exceed Central Bank of Nigeria’s single digit mark by year end.

“The slower pace in October was as a result of lower increases in most divisions which contribute to the Headline index with the exceptions being Transport, and Recreation and Culture divisions,” the data office stated in a mailed statement.

Both the Urban and Rural indices slowed (year-on-year).

Food prices edged lower in October, the NBS further indicated.

As observed by the Sub-index, prices eased marginally to 10.1 percent in October,  from 10.2 percent in September with higher pressures observed in the Meat, Fish, Oils and Fats, Fruits and  vegetables groups, particulalry as a result of heavy rains.

The food sub- index was weighted upon as a result of a slower increase in the Bread and Cereals; Milk, Egg and Cheese; and Potatoes, Yams and Other tuber groups, the latter which has increased at a slower pace for five consecutive months.

Core CPI eased for the second consecutive month in October by 0.2 percent points from 8.7 recorded in September.

“The Headline index slowed in October as the seasonal effects of the Muslim festive period dissipated,” NBS noted.

“The index increased by 0.4%, 0.2% points lower from 0.6% in September, surpassing the lowest pace recorded this year which was recorded in September.”

The largest increases were recorded in the Books & Stationeries, Motor cars, Liquid Fuel (kerosene), and Garments groups.

Many analysts had predicted at least a modest 0.1 percent rise in inflation to 9.5 percent, especially as CBN currency controls persist.

A 40 percent reduction in crude oil income has brought the naira under inense pressure and forced the federal government to cut costs in order to shore up revenue.

President Buhari, just last week reduced the number of ministeries to 24 in ordet to cut down on the huge cost of running government, also warning the new cabinet members that his administration will not entertain wastage.

CBN Governor Godwin Emefiele imposed foreign currency controls this year to stabilise the naira, restricting imports and adding to price pressures.

Most analysts have called for the devaluation of the local currency but Emefiele, with the full backing of Aso Rock insists it will not happen because of the huge negative impact it will have on the import-dependent economy and ofcourse citizens.

Onyinye Nwachukwu