Nigeria’s soaring headline inflation has accelerated to 22.79 per cent.
With the development, the hardship being experienced by the masses has further increased.
According to the National Bureau of Statistics, NBS, Consumer Price Index, CPI, for June, the country’s inflation rate increased six consecutive times this year despite the Central Bank of Nigeria’s measures to mitigate against the trend.
CBN had continued to increase the Monetary Policy Rate to reduce inflation, with the MPR standing at 18.5 per cent, but there seems to be no effect on the country’s rising inflation.
In perspective, CPI measures the average change over time in the prices of goods and services consumed by people for daily living.
The recent inflation figure represents 0.38 per cent increment compared with the previous month’s rate, which stood at 22.41 percent.
In April, the inflation rate stood at 22.22 per cent relative to March 2023 headline inflation rate, which was 22.04 per cent. Also, February was 21.91 per cent compared to January 2023 headline inflation rate, which was 21.82 per cent.
With 25.75 per cent, Lagos state led the chart with the highest headline inflation rate on a state-by-state analysis.
Ondo (25.40 per cent), Kogi (25.23 per cent), while Borno (20.44 per cent), Zamfara (20.93 per cent) and Ekiti (21.06 per cent) recorded the slowest rise in headline inflation on a year-on-year basis.
On a month-on-month basis, however, June 2023 recorded the highest increases in Ogun (3.21 per cent), Plateau (3.05 per cent), Jigawa (3.00 per cent), while Zamfara (1.40 per cent), Delta (1.42 per cent), and Rivers (1.54 per cent) recorded the slowest rise in month-on-month inflation.
Undoubtedly, the negative trend of rising inflation is exacerbated by the removal of fuel subsidies and foreign exchange window unification introduced by President Bola Ahmed Tinubu’s administration in June.
Consequently, the fuel subsidy removal immediately impacted the prices of transportation, goods and services.
NBS said June’s food inflation rate stood at 25.25 per cent, determined by the rise in prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetables, milk, cheese, and eggs.
Meanwhile, a market survey conducted showed that prices of goods and services have increased by 20 to 50 per cent.
For instance, a ‘Mudu’ of garri, which was sold at N700 before fuel subsidy removal is now N900; a mudu of rice moved from N1,000 to 1,200, Beans (White Beans) increased to N850 per mudu from N700, one liter of groundnut oil moved from N1,200 from N900, a sachet of tomato increased to N150 from N100, a crate of eggs now sell at N2300 from N1900.
The prices also hiked in communications services, health care, house rent, school fees, transportation, clothing/footwear, and other goods and services across the value chain.
Although the federal government had proposed N500 billion in palliatives, where 12 million households would get N8,000, mixed reactions have trailed the development.
Some believe the palliative would be inadequate to cushion the effect of the fuel subsidy removal; others maintained that it would be impactful provided the right people benefit from it.
Dr Ayo Tariba, the Chief Executive of the Economic Associates disclose on Monday that the impact of fuel subsidy removal would continue in three ways- price increment, quantity and reduction in real income effects.
“The impact of fuel subsidy removal, forex unification may not be instantaneous.
“It may take three or four months. The exchange rate unification impact is minimal, but the fuel pump price is huge.
“For instance, a car owner who fills his car before the subsidy removal but cannot do the same any more has to reduce the quantity purchased.
“There are price, quantity and reduction in real income effects of rising inflation”, he said.
Also, Idakolo Gbolade, Chief Executive Officer of SD & D Capital Management, said the soaring inflation is not unconnected with the fuel subsidy removal and the forex unification policy.
He stated that the recent drop in Naira against the US dollar is also responsible for the rising inflation figure.
Gbolade advised that the government should pump US Dollars into the system to halt the depreciation of the Naira.
“The recent inflation figures are expected given the recent removal of subsidy and the government’s foreign exchange policy which has put a lot of pressure on goods and services and the disposable income of the people.
“The new administration has recently declared a food security emergency which must be immediately carried out alongside other proactive measures to arrest the soaring food prices. The release of grains from the Federal government’s strategic grains reserves would also help reduce the prices of staples.
“The CBN should, as a matter of urgency, release more US dollars into the system to force down the continuous rise of the US dollar rate to the Naira because it has a significant contribution to the latest inflation figures”, he stated.
Mr Kunle Olubiyo, the President of Network of Energy Reforms Nigeria, Nigeria Consumer Protection Network, said the government should immediately open its land borders to crash the price of food.
“The Federal Government may need to open the land borders to allow for the importation of some vehicles and food items to first of all crash the cost of essential commodities & food items even if the opening of the land borders is going to be for three months – to a maximum of 6 months.
“It is obvious that essential food commodities are seriously in short supply compared to the huge demand.
“Excessive demand at the moment is chasing supply in serious deficits.
“Government can introduce some consumption taxes and duties to make up for losses in revenue and plough back those gains into the development of Agric Business & Commercial Agriculture Value Chain”, he noted.
Similarly, an accounting and financial development don at Lead City University, Ibadan, Prof Godwin Oyedokun, said Nigeria is bleeding from the mess former President Muhammadu Buhari had done to the country’s economy.
He noted that there would be difficulties in the short term, but in the long run, the nation’s economy would return.
“In the short-run, the recent economic reforms have a difficult impact on Nigerians, but It is in the long run that Nigerians will start filling the impact of the economic policies of this government.
“The current trend of inflation is not a result of what happened yesterday but a result of what has happened over the years,” he stated.