The hike in food prices and other individual consumption across the country further increased the rate of inflation in Nigeria to 14. 23 per cent in October.
Figures released by the National Bureau of Statistics on Monday showed that the country ’ s inflation increased again in October , moving up by 0 . 52 per cent when compared to what was recorded in the preceding month.
This came as analysts stated that the continued closure of Nigeria ’ s borders and the persistent hike in petrol price , among others , further worsened the rate of inflation in Nigeria.
The NBS said , “ The Consumer Price Index , which measures inflation increased by 14 . 23 per cent ( year- on – year) in October 2020.
“ This is 0. 52 per cent points higher than the rate recorded in September 2020 (13 . 71 per cent ). ”
It was observed that increases were recorded in all Classification of Individual Consumption by Purpose divisions that yielded the headline index.
On a month- on – month basis , the headline index increased by 1. 54 per cent in October , representing 0. 06 per cent rate higher than the rate recorded in September ( 1. 48 per cent ).
The percentage change in the average composite CPI for the 12 – month period ending October over the average of the CPI for the previous 12 – month period was 12. 66 per cent.
This showed a 0 . 22 per cent point rise from 12 . 44 per cent recorded in September.
The urban inflation rate increased by 14. 81 per cent ( year- on – year) in October from 14 . 31 per cent recorded in September.
Rural inflation rate, on the other hand , increased by 13. 68 per cent in October from 13 . 14 per cent in September.
On a month- on – month basis , the urban index rose by 1. 6 per cent in October , up by 0. 04 from 1. 56 per cent recorded in September.
The rural index also rose by 1. 48 per cent in October 2020 , up by 0. 08 from the rate recorded in September (1 . 40 per cent ).
The corresponding 12 – month year- on – year average percentage change for the urban index was 13 . 29 per cent in October.
This was higher than 13 . 07 per cent reported in September , while the corresponding rural inflation rate in October was 12 . 09 per cent compared to 11 . 86 per cent recorded in September.
A professor of political economy and management expert , Pat Utomi , said Nigeria was in need of investments to rejig economic activities.
He said , “ Typically , what you do to bring down inflation , from the monetary policy point of view , is to reduce the money supply to the economy. However , we desperately need investments to resume economic activity.
“ Already , there is very little money reaching the investor . The investment to jumpstart growth is not taking place .
“ To make money expensive by hiking the interest rate ( which is a natural response to inflation ) will make matters worse . This is because it will discourage investment and we will get a really awkward situation.
“ The Nigerian economy will not grow until we have banks sensitive to development . For too long , banks have been profitable from lending to three or four people in the economy.
“ The banking industry has not supported real growth in the economy. Now, we have a situation where the supply chain has made products unavailable, pushing costs and therefore we have inflationary pressures . ”
Utomi said that the challenge of the moment was to ensure that whatever credit available goes to the productive sector and to crash the cost of governance.
He called for stimulus responses and more investments to create growth , saying Nigeria might go on the path of Venezuela.
The President of the Association of Capital Market Academics of Nigeria , Prof . Uche Uwaleke , stated that the rise in inflation was caused by many factors.
Uwaleke said , “ With the effect of COVID – 19 on the economy still lingering , especially from supply chain disruptions , it is no surprise that headline inflation has continued to rise.
“ This is with the NBS October number coming in at 14 . 23 per cent up from 13. 71 per cent the previous month.
“ Contributory factors include the continuous border closure , the increase in VAT and implementation of stamp duty.
“ The high exchange rate, especially in the parallel market , and the increase in the pump price of fuel also contributed because , according to the NBS, a major cause of core inflation came from increase in transport cost . ”
Uwaleke further noted that the rise in food inflation was worrisome , adding that this was despite the interventions of the Central Bank of Nigeria.
“ Consequently , government should focus on increasing food production by aggressively implementing the massive agricultural programme contained in the Economic Sustainability Plan , ” he said.