Nigeria’s June Inflation Surges to 22.79% After Subsidy Removal

By Adedapo Adesanya

Nigeria’s headline inflation rate accelerated marginally for the sixth consecutive time to 22.79 per cent in June, showing the impact of the removal of fuel subsidies by President Bola Tinubu in May 2023.

According to data by the National Bureau of Statistics (NBS) released on Monday, prices of goods and services in the country increased by 0.38 per cent last month from 22.41 per cent the previous month.

The inflation rate climbed to an 18-year high in June after the President, as part of his first assignment, scrapped fuel subsidies and later floated the currency as well as declaring a state of emergency to control the cost of food.

On a year-on-year basis, the headline inflation rate was 4.19 per cent points higher compared to the rate recorded in June 2022, which was 18.60 per cent. This shows that the Headline inflation rate (year-on-year basis) increased in June 2023 when compared to the same month in the preceding year (i.e., June 2022).

Giving a breakdown, it was noted that Food and Non-Alcholic beverages contributed 11.81 per cent to the headline index. This was followed by Housing, Water, Electricity, Gas, and Other Fuels with 3.81 per cent and Clothing and Footwear saw a 1.74 per cent contribution.

Transport added 1.48 per cent, while Furnishings, Household Equipment and Maintenance added 1.15 per cent. Others like Education and Health among others saw less than 1 per cent contribution respectively.

The percentage change in the average CPI for the twelve months period ending June 2023 over the average of the CPI for the previous twelve months period was 21.54 per cent, showing a 5.00 per cent increase compared to 16.54 per cent recorded in June 2022.

On a year-on-year basis, the urban inflation rate in June 2023 was 24.33 per cent; this was 5.23 per cent points higher compared to the 19.09 per cent recorded in June 2022, while on a month-on-month basis, the urban inflation rate was 2.31 per cent in June 2023, which was 0.21 per cent points higher compared to May 2023 (2.09 per cent).

The corresponding twelve-month average for the urban inflation rate was 22.38 per cent in June 2023. This was 5.30 per cent points higher compared to the 17.09 per cent reported in June 2022.

The NBS noted that the rural inflation rate in June 2023 was 21.37 per cent on a year-on-year basis; this was 3.25 per cent points higher compared to the 18.13 per cent recorded in June 2022.

On a month-on-month basis, the rural inflation rate in June 2023 was 1.96 per cent, up by 0.16 per cent points compared to May 2023 (1.80 per cent).

The corresponding twelve months average for the rural inflation rate in June 2023 was 20.76 per cent. This was 4.75 per cent points higher compared to the 16.02% recorded in June 2022.