The inflation rate in Africa’s largest economy has matured for the fifth month in a row. In December 2019, the rate was at 11.98 percent,. But now, in January 2020, it stands at 12.3 percent.
This is the highest for the country since May 2018 when the inflation was at 11.61. This is according to data released by the National Bureau of Statistics, a report which blamed the increase of food prices.
Ever since Nigeria decided to slam shut its borders, more cash has gone into feeding on a general scale. Food items are being sold for some of the highest-ever prices in the country, as suppliers from neighboring countries have been cut off – leaving the nations to rely on homegrown food.
Bread, cereals, oils, fats, potatoes, other tubers, meat and fish took the worst hit, as these are the items consumed daily by Nigerian households.
NBS’s data reveals that the month-on-month headlines index increased by 0.87 percent in January 2020, which signals a 0.02 percent rate higher than the 0.85 percent rate recorded in December 2020.
As for the food sub-index, the month-on-month increased was by 0.99 percent in January 2020. That means it went up by 0.2 percent from 0.9 percent it stood at in December 2019.
“The composite food index rose by 14.85% in January 2020 compared to 14.67% in December 2019,” the report said.
Considering that the Nigerian government closed its borders in August 2019 to prevent the smuggling of goods into the country, its hard to see whether the inflation is a small price to pay for the yields of the policy.
In November 2019, CBN Governor, Godwin Emefiele said the impact of the closure on inflation would be temporary. But the effects have lingered for more than 6 months, putting many things in limbo.
Nevertheless, food price is not the only thing finding its way up the tree. Value-added tax (VAT) has also come to its highest-ever in Nigeria, at 7.5 percent. Electricity tariffs are next in line, all of which could take inflation higher – possibly to 9 percent.
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