• Tuesday, March 05, 2024
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BusinessDay

Kogi, Lagos, Rivers top states with inflation above 30%

Why cost of essential commodities must decrease alongside fall in dollar price – Adeoye

Nigeria’s headline inflation rate hit 28.2 percent in November, and eight of the states – Kogi, Lagos, Rivers, Oyo, and Akwa Ibom have long exceeded the 30 percent mark.

With inflation rates at 33.28, 32.30, and 32.25 percent Kogi, Lagos and River are states with the highest inflation rates in Nigeria according to the latest data from the National Bureau of Statistics.

Ayo Teriba, an economist, said these states are major transit hubs and host a high transit population that drives the prices of goods and services up.

“Kogi is a transit point boarded by 10 states including the FCT and every time they are hosting a high transit population who raise the prices of goods and services,” he said Lagos also being a host to seaports, airports and the commercial capital of the country also hold a high transit population.

For Rivers, “It’s also the transit hub for the south-south and hosts a large population of people,” he said.

He mentioned that all these combined with seasonal factors which make things relatively high at this time of the year are causes.

Soaring food prices is said to be the largest cause of inflation. Nigeria’s food inflation has been accelerating since August 2019 and crossed 30 percent in October rising to 32.84 percent in November.

Similarly, Kogi, Kwara and Rivers all have food inflation above 40 percent. Oyo, Akwa Ibom, Bauchi, Ogun, Kwara, are the other five states with their headline inflation rate at over 30 percent.

Teriba also explained that for these states higher inflation might be a base effect.

It refers to the impact of an increase in the price level (i.e. previous year’s inflation) over the corresponding rise in price levels in the current year (i.e., current inflation).

If the inflation rate was low in the corresponding period of the last year, then even a small increase in the price index will give a high rate of inflation in the current year.

The following are the eight states with the highest inflation rate in Nigeria;

Kogi

Kogi tops the state with the highest inflation rate at 33.28 percent. It has consistently been part of the state with the highest inflation for months. The cost of food rose highest in Kogi, where the food inflation rate in the state surged to 41.29 percent.

Lagos
Lagos, the commercial capital of the country, recorded an inflation rate of 32.30 percent and food inflation rate of 39.20.

Rivers
Rivers take third place with a rise in goods and services by 32.5 percent and food inflation at 40.22 percent.

Oyo
Oyo state inflation rate hit 31.35 percent while food inflation hit 33.36 percent.

Akwa Ibom
For Akwa Ibom indigenes the prices of goods and services hit 30.69 on a year on a year basis, while the prices of food increased by 37.25 percent in November year on year.

Bauchi
Bauchi is another state in the north-central with a very high inflation of 30.30 percent but unlike Kogi and Kwara it has a much lower food inflation rate of 26.14 percent. The lowest of all 36 states.

Olumide Adesina, an analyst at Quantum Economics said that its food inflation rate is much lower compared to other north-central states because it is more of an agricultural state with most of its indigenous people being farmers.

Ogun
Ogun state inflation rate hit 30.20 percent while its food inflation rate increased to 35.49 percent in November.

Kwara
Kwara state is the least of the states with over 30 percent inflation rate at 30.16 percent with a very high food inflation rate of 40.72 percent.