Nigeria’s Inflation Jumps to 25.80% in August 2023

By Adedapo Adesanya

Nigeria’s inflation jumped to 25.8 per cent in August 2023 from 24.08 per cent in July, beating analysts’ expectations amid a surge in food and energy costs.

According to the data released by the National Bureau of Statistics (NBS) on Friday, the headline inflation rate showed an increase of 1.72 per cent points when compared to the July 2023 headline inflation rate.

On a year-on-year basis, the headline inflation rate was 5.27 per cent points higher than the rate recorded in August 2022, which was 20.52 per cent. This shows that the headline inflation rate (year-on-year basis) increased in August 2023 compared to the same month in the preceding year.

A breakdown showed that food and non-alcoholic beverages contributed 13.36 per cent to the inflation, housing water, electricity, gas, and other fuels raked in 4.32 per cent, clothing and footwear amounted to 1.97 per cent, transport came in at 1.68 per cent, furnishings & household equipment & maintenance added 1.30 per cent while education was quoted at 1.02 per cent.

Others included health at 0.78 per cent, miscellaneous goods and services at 0.43 per cent, restaurant and hotels at 0.31 per cent, alcoholic beverage, tobacco and kola at 0.28 per cent, recreation and culture at 0.18, and communication at 0.18 per cent.

Food inflation jumped to 29.34  per cent in the month under review on a year-on-year basis, which was 6.22 percentage points higher than the rate recorded in August 2022 (23.12 per cent). The rise in food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, fish, fruit, meat, vegetables, potatoes, yam and other tubers, vegetables, milk, cheese, and eggs, according to the stats office.

On a month-on-month basis, the food inflation rate in August 2023 was 3.87 per cent, 0.41 per cent points higher than the 3.45 per cent achieved in July 2023. This was caused by increases in prices of Bread and cereals, Potatoes, Yam and other tubers, fish, oil and fat, coffee, tea, and cocoa.

Business Post reports that the latest inflation figures exceeded expectations by Meristem Securities Limited, which projected the numbers at 25.37 per cent compared with the 24.08 per cent in the preceding month.

The firm said the 1.29 per cent surge in the average cost of goods and services would be influenced by the rise in the “prices of food, premium motor spirit (PMS), the lingering challenges in sourcing foreign exchange (FX) and depreciating exchange rate.”