Nigeria’s inflation rate dropped by 0.37 per cent to stand at 17.01 per cent at the end of August, from the 17.38 per cent recorded in July 2021.
The Consumer Price Index (CPI), which measures inflation, which was released by the National Bureau of Statistics (NBS) showed that increases were recorded in all divisions that yielded the headline index.
The report showed that urban inflation rate increased by 17.59% in August from 18.01% recorded in July, while the rural inflation rate increased by 16.43% in August from 16.75% in July.
Meanwhile, NBS reported that the composite food index rose by 20.30% in August from 21.03% in July.
“This rise in the food index was caused by increases in prices of bread and cereals, milk, cheese and eggs, oils and fats, potatoes, yam and other tuber food products, and meat and coffee, tea and cocoa,” the report stated.
The report also noted that the core inflation, which excludes the prices of volatile agricultural produce, was 13.41% in August, down by 0.31% from 13.72% in July.
“The highest increases were recorded in prices of shoes and other footwear, household textiles, motor cars, garments, games of chance, major household appliances, medicals, among others.
Food inflation on a year-on-year basis was highest in Kogi (28.76%), Oyo (23.69%) and Gombe (22.37%), while Rivers (17.69%), Edo (17.26%) and Bauchi (17.24%) recorded the slowest rise in year-on-year food inflation.
An economist and former DG of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf said: “The marginal decline in the August headline inflation by 0.37% to 17.01% (year on year) is noteworthy. Equally noteworthy is the consistency of the composite price index over the past four months.”
He however said these declines remain very marginal and raises the question of materiality.
“The major inflation drivers have not abated. These factors include transportation costs, logistics challenges, exchange rate depreciation, forex liquidity issues, hike in energy prices, climate change, insecurity in many farming communities and structural bottlenecks to production.
“These are basically supply side issues. Any mitigation measures would have to be situated in the context of these factors,” he stated.