Continuous increase in prices of bread and cereal, as well as other food items pushed Nigeria’s annual inflation rate to 21.91 per cent in February, the highest in 17 years.
Inflation is the general increase in prices of goods and services while the inflation rate is the rate of increase in prices of goods and services.
The Nigeria Bureau of Statistics, NBS, in its inflation report for February 2023, said: “In February 2023, the headline (annual) inflation rate rose to 21.91% compared to January 2023 headline inflation rate which was 21.82%. Looking at the trend, the February 2023 inflation rate showed an increase of 0.09% points when compared to January 2023 headline inflation rate.
“Similarly, on a year-on-year basis, the headline inflation rate was 6.21% points higher compared to the rate recorded in February 2022, which was 15.70%. This shows that the headline inflation rate (year-on-year basis) increased in February 2023 when compared to the same month in the preceding year (i.e., February 2022).
According to the NBS increases in prices of bread and cereal contributed 21.67 per cent to the rise in the annual inflation rate in February, followed by Actual and Imputed Rent (7.74%), Potatoes, Yam and Other Tubers (6.06%), Vegetable (5.44%) and Meat (4.78%)
The above showed that increases in prices of food related items contributed about 40 per cent to the increase in the annual inflation rate.
What does this mean?
The dominance of food related items in the continued increase in the annual inflation rate implies that Nigerians are spending more of their income on feeding.
This is reflected in the Food inflation rate which rose further to 24.35% in February. The Food inflation measures rate of increase in prices of food items.
The NBS stated: “The food inflation rate in February 2023 was 24.35% on a year-on-year basis; which was 7.24% points higher compared to the rate recorded in February 2022 (17.11%). The rise in food inflation was caused by increases in prices of Oil and Fat, Bread and Cereals, Potatoes, Yam and Other Tubers, Fish, Fruits, Meat, Vegetable, and Food Product etc. On a month-on-month basis, the food inflation rate in February 2023 was 1.90%, which was 0.18% points lower compared to the rate recorded in January 2023 (2.08%). The average annual rate of food inflation for the twelve-months ending February 2023 over the previous twelve-months average was 22.12%, which was a 2.44% points increase from the average annual rate of change recorded in February 2022 (19.69%).
Food inflation in states
Meanwhile, Kwara, Imo and Lagos states recorded the highest food inflation in February 2023 while Yobe, Edo and Ogun states recorded the lowest Food inflation rate during the month.
The NBS said: “In February 2023, food inflation on a year-on-year basis was highest in Kwara (29.51%), Imo (27.47%), and Lagos (27.42%), while Sokoto (18.54%), Jigawa (19.67%) and Yobe (21.89%) recorded the slowest rise on year-on-year food inflation.
“On a month-on-month basis, however, February 2023 food inflation was highest in Yobe (3.15%), Edo (3.03%), and Ogun (2.90%), while Rivers (0.75%), Sokoto (0.89%) and Nassarawa (0.90%) recorded the slowest rise on month-on-month inflation.”
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