Nigeria’s core inflation rate, a sub index of the general inflation rate, dropped for the first time in 11 months in February 2023.
According to data released by the National Bureau of Statistics (NBS) on Wednesday, core inflation which excludes the prices of volatile agricultural produce declined marginally by 0.32 percent points to 18.84 percent in February, the first time since March 2022 from 19.16 percent in the previous month.
“On a month-on-month basis, the core inflation rate was 1.06 percent in February. It stood at 1.82 precent in January, down by 0.76 percent points,” it said.
It said the average twelve-month annual inflation rate was 16.92 percent for the twelve-months ending February 2023.
“The fall in core inflation was associated with the decline in imported inflation as a result of the decline in inflation in countries like China where Nigeria imports from,” analysts at Financial Derivatives Company Limited (FDC), led by economist Bismarck Rewane, said in their latest Economic Bulletin report.
They said the decrease was also partly due to the ease in fuel scarcity, and a relatively stable exchange rate at the parallel market.
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“The core inflation rate, aided in part by the improvement in petrol availability and slowdown in business activities due to elections and cash crunch rose less steeply by 18.8 percent year-on-year compared to 19.2 percent year-on-year in the prior month,” analysts at Afrinvest limited added.
BusinessDay reported yesterday that the country’s headline inflation rate rose for the second straight month in February, largely driven by higher food prices.
The inflation rate rose to a new 17-year high of 21.91 percent from 21.82 percent in the previous month, according to NBS.
“The contributions of items on a class basis to the increase in the headline index are presented thus: bread and cereal (21.67 percent), actual and imputed rent (7.74 percent), potatoes, yam and other tubers (6.06 percent), vegetable (5.44 percent) and meat (4.78 percent),” it said.
It said on a month-on month basis, inflation slowed to 1.71 percent, which was 0.16 percent points lower than the rate recorded in January 2023 (1.87 percent).
“This means that in February 2023, on average, the general price level was 0.16 percent lower relative to January 2023,” the report said.
Ayorinde Akinloye, an investor relations analyst at Seplat Energy Plc, said the pressure in food supply affected food prices, thereby pressuring the overall inflation numbers.
“We are beginning to see the impact of low food supply caused by poor harvest as a result of low rainfalls and floods,” he said.
Food inflation, which constitutes 50 percent of the inflation rate, was 24.35 percent, on a year-on-year basis, which was 7.24 percent points higher compared to the rate recorded in February (17.11 percent).
On a month-on-month basis, the food inflation rate in February was 1.90 percent, which was 0.18 percent points lower compared to the rate recorded in January (2.08 percent).
States that recorded the highest year-on-year increase were Bauchi (24.59 percent), Rivers (24.40 percent), and Ondo (24.27 percent), while Sokoto (18.90 percent), Borno (18.94 percent) and Cross River (19.62 percent) recorded the slowest rise in inflation.
“On a month-on-month basis, however, February 2023 recorded the highest increases in Edo (2.76 percent), Ogun (2.64 percent), and Yobe (2.36 percent), while Bayelsa (0.74 percent), Borno (0.95 percent) and Taraba (1.03 percent) recorded the slowest rise,” the NBS report said.
