High food prices push inflation to 27.33% in October

The country’s headline inflation rate jumped to 27.33 percent year on year in October 2023, despite higher fuel expenses and a declining naira.

According to the most recent National Bureau of Statistics (NBS) inflation figures, the October inflation figure was 0.61 percent higher than the 26.72 percent recorded in September 2023.
On a monthly basis, the headline index fell to 1.91 percent in October, down 36 basis points from the 2.45 percent decrease reported in September.

According to the NBS, food inflation grew by 31.52 percent year on year in October 2023, representing a 0.88 percent increase over the previous month’s 30.64 percent.

Commenting on the inflation data, Dr. Isa AbdulMumin, director, Corporate Communications of the Central Bank of Nigeria (CBN), expressed optimism that the low rate of increase in the average price level in October compared to September 2023 was a sign that the Bank’s monetary policy stance to tighten rates and its money market reforms were having the desired effect. Aggressive monetary tightening through multiple liquidity tools, such as eliminating the cap on the Standing Deposit Facility (SDF) and Open Market Operations, has lifted Open Buy Back (OBB) rates from less than 1% in August to their forecast levels around the monetary policy rate today.

Despite a 0.61 percent increase in the headline inflation rate from 26.72 percent in September 2023 to 27.33 percent in October 2023, Isa remained confident that the CBN was on track to achieve price stability.
According to him, available statistics showed that the first signs of price deceleration were recorded in September, and that subsequent money market reforms, which began in October, had accelerated price easing, as evidenced by the significant drop in month-on-month changes recorded in October.

“Moderation in month-on-month changes in prices observed in the headline, food and core components of the consumer basket followed reforms in the money market and relative stability in the FX market,” he said.

Food inflation reaches 31.5%.

Food inflation remained a primary driver of the headline inflation rate in October, reaching 31.52 percent. This represents a 7.80% point gain from the 23.722% reported in October 2022.

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According to the National Bureau of Statistics’ most recent CPI report, the increase in food inflation was caused by price increases in bread and cereals, oil and fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables, milk, cheese, and eggs.

According to the Food and Agriculture Organization, Nigeria has reached an unacceptably high level of food consumption as a result of a considerable increase in staple food prices caused by increases in fuel prices, inflation, and the high cost of food production.

According to FAO, over 26.5 million people, including internally displaced people (IDPs), are likely to face extreme food insecurity between June and August 2024.

It indicated that when the lean season (June to August 2024) approaches, households may face a minor to moderate decline in food consumption, potentially pushing many states into the crisis phase.

Food inflation was highest in Kogi, Kwara, and Lagos states in October, while it was slowest in Borno, Kebbi, and Jigawa.

On a month-to-month basis, however, October 2023 food inflation was highest in Yobe (5.35%), Sokoto (3.68%), and Jigawa (3.45%), while Edo, Katsina, and Rivers had the least rise in inflation.

The headline inflation rate jumped to 27.33 percent over the quarter, up from 26.72 percent in September 2023.