Nigeria’s Inflation Jumps to 3-Year High of 15.75% in December

By Aduragbemi Omiyale

Inflation in Nigeria rose to a 3-year high of 15.75 per cent in December 2020 from the 14.89 per cent it recorded in November 2020, data from the National Bureau of Statistics (NBS) revealed on Friday.

The agency said this was 0.86 per cent rise in the headline inflation and was caused by a significant spike in the food index, which stood at 19.56 per cent in the period under review in contrast to 18.30 per cent recorded in the preceding month.

In the report released by the NBS, it was disclosed that the increase in the food index was influenced by a rise in the prices of bread and cereals, potatoes, yam and other tubers, meat, fruits, vegetable, fish and oils and fats.

The agency noted that last month, food inflation on a year-on-year basis was highest in Edo at 24.14 per cent, Kogi at 23.14 per cent and Sokoto at 22.24 per cent, while Bauchi at 16.53 per cent, Abia at 16.04 per cent and Nasarawa at 15.71 per cent recorded the slowest rise.

Also in the report released today, the stats office disclosed that the urban inflation rate increased by 16.33 per cent (year-on-year) in December 2020 from 15.47 per cent recorded in November 2020, while the rural inflation rate increased by 15.20 per cent in December 2020 from 14.33 per cent in November 2020.

Business Post reports that Nigeria’s inflation has continued to rise monthly. This has become a source of worry for observers and economists, who have tasked the government to do something about it urgently.

The inflation started to jump after the federal government abruptly closed the land borders on August 20, 2019. This affected the supply of food items to the markets, causing prices to skyrocket.

This supply chain was also badly affected by flood in the northern part of the country last year and two years ago, further putting pressure on prices.

Also, insecurity in the northern part of Nigeria, where most of the food items are produced, chased many farmers away from the farms, shrinking the supply. As if these were not enough, the COVID-19 pandemic wreaked more havoc last year as the economy was shut down to control the spread of the virus.

In late December 2020, the federal government announced the reopening of four land borders, though it said the ban on the importation of food items; rice, frozen foods and others, remains.

It is believed that the inflation figures will begin to moderate from the end of the first quarter of the year or from the second quarter, a period Nigeria is expected to exit the recession it entered for the second time in four years in the third quarter of last year.