By Aduragbemi Omiyale
“We expect food inflation to retract slightly downwards to 19.57 per cent year-on-year [in September] versus 20.31 per cent in August 2021) while [the] overall headline inflation to moderate to 16.60 per cent in September,” analysts at Meristem have projected.
Last month, the National Bureau of Statistics (NBS) had said inflation rate in Nigeria slowed to 17.01 per cent in August from 17.38 per cent in July.
In its monthly report, Meristem said it expects the inflation to moderate due to “post-harvest supplies of staples food such as maize, yam and rice.”
However, it stressed that this would be threatened by the rising prices of as “dairy product, wheat flour and eggs” mostly in the south eastern part of the country.
Recently, a report emerged that the Central Bank of Nigeria (CBN) was planning to add wheat to the list of items not eligible for foreign exchange (FX) at the official channels.
According to analysts, this action would further raise the price of pastries, especially at a time bakers have increased the price of bread and other products because of the high cost of ingredients like sugar, butter and others.
It was argued that if the CBN goes ahead with the plan, importers of wheat will have no choice than to source for forex at the black market to bring in wheat into Nigeria, which will further have a negative effect on the already-suffering populace.
At the moment, the apex bank is trying to ration FX because of shortage in supply despite the recent rise in the price of crude oil, which is the nation’s source of forex earnings.
“While FX rate remain relatively stable in the I/E (Investors and Exporters) window, we suspect rates are still pressured in the parallel market based on the CBN clamp down on supply of FX to BDC (Bureaux De Change).
“Nonetheless, the growing FX accretion to the reserve (up by 8.13 per cent month-on-month in September) is likely to improve FX liquidity.
“Other factors such as rising crude oil price (now above $80/pb) made no impact on PMS (premium motor spirit) pump prices, which have remained the same since its last revision in November 2020,” a part of the report stated.
Business Post reports that the stats office is expected to release the inflation numbers for September on Friday, October 15, 2021.
