Nigeria’s Inflation Drops to 18.02% in September
Nigeria’s inflation rate dropped below 20% for the first time in three years, settling at 18.02%, according to consumer price index (CPI) data released by the statistics office on Wednesday.
Annual inflation slowed to 18.02% in September from 20.1% the month before, the National Bureau of Statistics said in a statement on Wednesday.
The data marked the sixth consecutive monthly decline in inflation and may convince the Central Bank of Nigeria’s monetary policy committee to cut interest rates at its last meeting of the year on Nov. 25.
On a month-on-month basis, consumer prices slowed by 2 bps to 0.72% compared with +0.74% in the comparable period in August. The consumer price data showed that food inflation decreased by 500 bps to 16.87% year on year in September as against 21.87%.
On a month-on-month basis, the food index declined by 1.57% as against +1.65% in August, attributed to the rate of decrease in the average prices of Maize (Corn) Grains, Garri, Beans, Millet, Potatoes, Onions, Eggs, Tomatoes, fresh pepper, etc.
Elsewhere, core inflation, all items excluding farm produce and energy, eased by 80 bps to 19.53% year on year in September compared with 20.33% year on year in the previous period.
On a month-on-month basis, the core inflation slowed to 1.42% month on month. PIA: Reps Urge Oil Companies to Comply With Extant Laws
Food Inflation
Food inflation on the back of improved farm produce. The food inflation rate decelerated by 500 bps to 16.87% year on year from 21.87% in August. It is worth noting that the food inflation declined significantly by -322 bps to -1.57% m/m in September.
Despite these improvements, imported food inflation rose to 3.3% m/m from 1.28% in August, even as the Naira appreciated 3.67% m/m to ₦1,475.35/US$ in September.
This divergence highlights persistent external cost pressures along the import value chain as well as the lag effect between the exchange rate and when the imported goods hit the Nigerian market.
Internationally, the FAO Food Price Index averaged 128.8 in September, down marginally from August as relatively lower global prices in cereals, dairy, sugar, and vegetable oils.
Core inflation eased to 19.53%% y/y versus –80bps from 20.33% in July. However, on a m/m basis, core inflation remained somewhat sticky, declining marginally by 1bps to 1.42% from 1.43%, in August.
The persistence reflects broad-based cost pressures across non-food services, including housing, water, electricity, gas and other fuels, services, furnishing, household, equipment and routine household maintenance and education services
At the sub-national level, Adamawa (23.69%), Katsina (23.53%), and Nasarawa (22.29%) recorded the highest headline inflation rates in September, reflecting stronger price pressures. Meanwhile, Anambra (9.28%), Niger (11.79%) and Bauchi (12.36%) recorded the lowest inflation, indicating relatively lower price growth.
Inflation accelerated the most in Zamfara (9.36%), Adamawa (8.15%), and Nasarawa (7.49%), while Niger (-8.14%), Oyo (-5.56%), and Bayelsa (-4.61%) saw the steepest declines.
