• Friday, July 19, 2024
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Inflation climbs at fastest pace in flood-hit Kogi, Rivers

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Kogi, Rivers, Ebonyi, Bauchi, and Gombe states recorded the fastest yearly rise in prices across the country, data compiled from the National Bureau of Statistics (NBS) show.

Kogi saw the fastest increase in inflation rate from January to September, followed by Rivers, Bauchi, and Ebonyi.

Experts say the rapidly rising costs in these states are propelled by rising food and transportation costs as well as rent for Rivers State.

“Most of these states suffer from local factors such as higher diesel cost, bad roads, which are fuelling an increase in transportation and food costs, than other states,” Muda Yusuf, founder of the Centre for Promotion of Private Enterprise, told BusinessDay.

“It shows that the citizens of these states suffer more from the impact of the accelerating inflation in the country,” Yusuf said.

He added that rents are fast rising in Rivers State and could be a factor responsible for the accelerating inflation in the state.

Nigeria’s inflation rate quickened to a 17-year high of 20.7 percent in September, a level that shows it is more expensive to live in Africa’s most populous nation today than it was in 2015, according to the most recent inflation data from the NBS.

Food inflation, the key driver of Nigeria’s core inflation, hit 23.34 percent as over 90 percent of the country’s working population spends 60 percent of their income on food and related food-related expenses, analysts say.

But the situation is worse in Kogi, Rivers, Ebonyi, Bauchi, and Gombe as their citizens are hard hit by the impact of rising prices more than most of their counterparts across the country.

“High energy prices and flooding played a major contributing factor of Kogi State’s accelerating inflation rate,” said David Ibidapo, head of market data and research at AFEX Commodities Exchange.

This is evident in the monthly diesel price report by NBS, as Ebonyi recorded the highest price of diesel in August at N861.67, while Kogi recorded the eleventh highest price of diesel at N804.55.

Kogi, Rivers, Ebonyi, Bauchi, and Gombe are among the 29 states submerged in the current floods wreaking havoc across the country.

The floods, which have destroyed 70,566 hectares of farmland, damaged 45,249 houses and displaced over 1.4 million Nigerians with about 500 persons reported dead, according to the Ministry of Humanitarian Affairs, have sent prices of key food items on an upward trajectory, especially in communities affected by the flood.

Read also: Food inflation surges despite drop in global commodity prices

Experts say the inflation situation in these states will worsen as most of them have been submerged by floods.

Damilola Adewale, a Lagos-based economic analyst, said the floods would affect agricultural output, and harvest, thus causing a surge in prices and consumers’ purchasing power to further decline.

He said the impact would be felt more in states with a quicker rise in inflation. “The flood situation is a disaster for people in Kogi, Rivers, Ebonyi, Bauchi, and Gombe,” he said.

Ibrahim Tajudeen, director of research and strategy at Chapel Hill Denham, said over the next two to three months, Nigerians living in these states would witness an increase in their cost of living owing to the impact of the floods.

“Nigerians living in those states will likely witness an increase in the cost of living, particularly in the prices of food, on the back of the flooding that is happening. It is going to be tough for them,” Tajudeen said.

He said the government is not providing adequate assistance to prevent any form of negative impact from the flood.

Kogi and Rivers were among the 12 states that owe their civil servants at least a month salary as of July 28, 2022, according to a recent Nigerian Sub-National Salary Survey by BudgIT.