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The National Bureau of Statistics (NBS),has announced that Nigeria’s inflation rate for last December , increased by 15.63 per cent as against November’s 15.40 per cent.
The inflation rate in Nigeria has maintained a consecutive decline in the year-on-year headline inflation rate for a period of eight months, from the month of April 2021 with an interesting trajectory as follows: April (18.12 per cent), May (17.93 per cent), June (17.75 per cent), July (17.38 per cent), August 17.01 per cent), September (16.63 per cent), October (15.99 per cent), and November (15.40 per cent).
Dr Simon Harry, the Statistician General of the Federation, noted that the rate broke the eight months trend of decline.
He said:”However, it may interest you to note that this trend has been broken by the slight change in the month of December, 2021 as the inflation rate for all items (headline inflation) for the month increased to 15.63 per cent, year-on-year. Although, this is a decline when compared to the corresponding month in 2020 which recorded 15.75 per cent. This trend clearly shows an increase from 15.40 per cent recorded in the month of November, 2021 to 15.63 per cent in December, 2021. This is 0.23 per cent points higher than the rate recorded in November, 2021″.
He said the change in the declining trend for about eight months might have been caused by the increase in prices of goods and services as a result of increase in their demand during the month under review.
On month-on-month basis, he said the headline index increased by 1.82 per cent in December 2021. This is 0.74 per cent rate higher than the rate recorded in November 2021, which was 1.08 per cent.
He added:”The urban inflation rate increased to 16.17 per cent (year-on-year) in December, 2021 from 16.33 per cent recorded in December 2020, down by 0.16 per cent points, while the rural inflation rate increased to 15.11 per cent in December, 2021 from 15.20 per cent in December 2020, which was lower by 0.09 per cent points. On a month-on-month basis, the urban index rose to 1.87 per cent in December 2021, which was higher by 0.75 per cent points of the rate recorded in November 2021 which was 1.12 per cent, while the rural index also rose to 1.77 per cent in December, 2021, higher by 0.73 per cent points of the rate that was recorded in November 2021, which was 1.04 per cent.
The corresponding twelve-month year-on-year average percentage change for the urban index was 17.52 per cent in December, 2021. This is lower than the rate reported in November of the same year which was 17.55 per cent, while the corresponding twelve-month (month-on-month) average percentage change for rural index inflation rate in December, 2021 stood at 16.40 per cent from 16.42 per cent in November, 2021.
“In summary and in attempt to make comparison between the December and November, 2021 figures, it is important to note that headline Inflation for the month of December was 15.63 per cent, while that of November was 15.40 per cent” he said.
Commenting on the development,Dr.Muda Yussuf,Chief Executive Officer of Centre for the Promotion of Private Enterprise,CPPE,said although the economy witnessed an incremental deceleration in inflation over the past eight months before the reversal in December, high inflationary pressures remain a major concern to stakeholders in the Nigeria economy.
He said some of its implications include escalation of production and operating costs for businesses, leading to erosion of profit margins, drop in sales, decline in turnover and weak manufacturing capacity utilization,high food prices which impacts adversely on citizens welfare and aggravates poverty.
He also said the development constitutes heavy tolls on weak purchasing power which poses significant risk to business sustainability and price volatility which undermines investors’ confidence.
To arrest the current inflationary pressure, he advised the government to reform the foreign exchange market to stabilize the exchange rate, reduce volatility,address forex liquidity issues through appropriate policy measures and the security concerns causing disruption to agricultural activities.
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According to him,there was need for the government to address productivity issues in the real sector of the economy, the challenge of high transportation cost,reduce fiscal deficit financing by the CBN to minimize incidence of high-powered money in the economy as well as manage climate change consequences to reduce flooding and desertification.
He added that government should ensure the restoration of normalcy and good order at the nations ports to reduce transaction costs,reduce import duty on intermediate products and raw materials for industries to reduce production costs, address concerns around high energy cost and reate an investment friendly tax environment.
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