Inflation rate in Nigeria in the month of July 2022 rose to a 17-year high of 19.64 per cent. This compares to 18.6 per cent recorded in the previous month of June 2022.
The latest inflation data is according to the recently released Consumer Price Index (CPI) report for the month of July 2022, by the National Bureau of Statistics (NBS). The last time Nigeria’s inflation was above 19.64 per cent was in September 2005 when it rose to 24.32 per cent.
Further breakdown of the report shows that the urban inflation rate rose by 2.08 per cent to 20.09 per cent in July 2022 from 18.01 per cent recorded in July 2021, while the rural inflation rate hit 19.22 per cent from 16.75 per cent recorded in the corresponding period of 2021.
FOOD INFLATION
The closely watched indicator rose to its highest level in 14 months, standing at 22.02 per cent in July 2022, representing a 1.42 per cent -point increase compared to 20.6 per cent recorded in the previous month. On a month-on-month basis, the food inflation rate in July stood at 2.04 per cent; this is 0.01 per cent lower than 2.05 per cent recorded in the previous month.
According to the NBS, the rise in food inflation was caused by increases in prices of bread and cereals, food products, potatoes, yam and other tubers, meat, fish, oil, and fat. Meanwhile, the average annual rate of food inflation for the twelve-month period ending July 2022 over the previous twelve-month average was 18.75 per cent, which represents a 1.42 per cent points decline from the average annual rate of change recorded in July 2021 (20.16 per cent).
CORE INFLATION
The ‘’All items less farm produce’’ or Core inflation, which excludes the prices of volatile agricultural produce stood at 16.26 per cent in July 2022, compared to 15.75 per cent recorded in the previous month. This also represents the highest core inflation rate since January 2017, when the rate stood at 17.8 per cent.
On a month-on-month basis, the core inflation rate was 1.75 per cent in July 2022. This was up by 0.20 percent when compared to 1.56 per cent recorded in June 2022. Notably, the highest increases were recorded in prices of Gas, Liquid fuel, Solid fuel, Passenger transport by road, Passenger transport by Air, Garments, Cleaning, Repair and Hire of clothing.
Ukraine war, which caused a significant rise in energy prices, spiralling into a global energy crisis and food supply issue.
Nigeria is one of the countries with significant uptick in its cost of living as a result of high inflationary pressure. On a year-to-date basis, Nigeria’s inflation rate has increased by over 400 basis points from 15.63% recorded in December 2021 to 19.64 per cent in the review month.
This implies that the consumer price index has increased by 12.7 per cent between January and July 2022. This means that the purchasing power of Nigerians has been eroded. In basic term, keeping income at a fixed level, Nigerians are not able to purchase as much as they have been able to with their monies.
