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Tag: Inflation

  • World Bank Projects 2.8 Million More Nigerians to Fall Into Poverty Due to Inflation and Low Growth

    World Bank Projects 2.8 Million More Nigerians to Fall Into Poverty Due to Inflation and Low Growth

    By Milcah Tanimu

    The World Bank has projected that rising inflation and low economic growth in Nigeria will result in an additional 2.8 million people falling into poverty by the end of 2023. The bank’s report, titled ‘Macro Poverty Outlook: Country-by-country Analysis and Projections for the Developing World,’ highlights the impact of high inflation, which reached a 17-year high of 24.1 percent in July 2023. Contributing factors include surging food prices and the temporary impact of removing the fuel subsidy. The report notes that the cumulative increase in the monetary policy rate since May 2022 has had limited success in curbing inflation due to clogged transmission channels and direct credit allocation by the central bank. The fiscal deficit has also risen, driven by increasing interest payments, higher capital spending, and the persistent high cost of the fuel subsidy. The World Bank predicts that public debt will reach 45 percent of GDP in 2023, with debt service exceeding total revenue. While the current account balance recorded a surplus in Q1 2023, it has not been sufficient to increase foreign reserves, posing challenges for economic stability. The report suggests that future economic growth in Nigeria will depend on the implementation of macro-fiscal and inclusive structural reforms. The World Bank expects inflation to moderate by 2024 and suggests targeted measures, such as cash transfers, to mitigate short-term adjustment costs for the poor and vulnerable.

  • Nigeria’s inflation increases to 22.22%

    Nigeria’s inflation increases to 22.22%

    Nigeria’s April inflation figure increased to 22.22 per cent from 22.04 per cent last month.

    The National Bureau of Statistics Consumer Price Index released the report on Monday.

    The data represented a 0.18 per cent increase from April’s inflation figure.

  • Inflation hits 21.47 percent in November – NBS

    Inflation hits 21.47 percent in November – NBS

    Inflation rate rose from 21.09% in October to 21.47% in November 2022, according to the National Bureau of Statistics (NBS).
    In its document titled: ” CPI and Inflation Report November 2022,” on Thursday, the Bureau said headline inflation rate in November 2022 was 1.39%.

    The document explained that it was 0.14% higher than the 1.24% rate recorded in October 2021.

    NBS said: “In November 2022, on a year–on- year basis, the headline inflation rate was 21.47%.”
    According to NBS, this was 6.07% points higher compared to the rate recorded in November 2021, which was 15.40%.

    The document said this means that in the month of November 2022, the general price level was 6.07% higher relative to November 2021.

    “On a month-on-month basis, the Headline inflation rate in November 2022 was 1.39%, this was 0.15% higher than the rate recorded in October 2022 (1.24%),” it said.
    The document added that this means that in the month of November 2022, the general price level was 0.15% higher relative to October 2022.

    NBS said the percentage change in the average CPI for the twelve months period ending November 2022 over the average of the CPI for the previous twelve months period was 18.37%, showing a 1.39% increase compared to 16.98% recorded in November 2021.

  • CBN Raises Interest Rate to 16.5% To Battle Inflation

    CBN Raises Interest Rate to 16.5% To Battle Inflation

    The Central Bank of Nigeria, CBN has raised its interest rate to 16.5 per cent in a bullish move to stymie rising inflation and pressure on the naira, the country’s currency.

    The governor of the Central Bank of Nigeria CBN, Godwin Emefiele made this disclosure on Tuesday at the end of the Monetary Policy Committee meeting in Abuja.

    The apex had increased the interest rate to 14 per cent months ago.

    According to Emefiele, the move yielded requisite results on the country’s economy.

    Mr Emefiele announced that the committee also retained the Cash Reserve Ratio (CRR) at 32.5 per cent, and voted to retain the asymmetric corridor at +100 and -700 basis points around the MPR. The liquidity ratio was retained at 30 per cent.

    He added that the global inflationary pressure was quite high and there was a need to moderate the increasing inflationary concerns.

    He further disclosed that the MPC did not consider the need to loosen the rates due to the prevailing circumstances although he said there were indications previous decisions to hold increase rates were beginning to yield results.

    Cash Reserve Ratio is the share of a bank’s total customer deposit that must be kept with the central bank in the form of liquid cash, while Bank Liquidity Ratio is the proportion of deposits and other assets they must maintain to be able to meet short-term obligations.

    Earlier in the year, the CBN had raised the cash reserve requirement (CRR) to a minimum of 32.5% in a bid to mop-up liquidity.

    In October, DAILY POST reported that Nigeria’s inflation rate hit a 17-year high of 21.09% amid soaring prices of food and energy.

    CBN hopes that raising rates will reduce the money supply in the economy and rein in inflation, but some analysts also said that the move also faces the risk of slowing economic growth.

    A higher interest rate will raise the cost of borrowing for businesses and may make goods and services even more expensive for consumers as the Yuletide season approaches.

  • CBN and the lost fight against Inflation

    CBN and the lost fight against Inflation

    By Adefolarin A Olamilekan

    The global economy is currently uninspiring as it is still under the sieges of inflation. That demonstrates a spike in over 9% globally. With a worsening purchasing power and dampening economic outlook of countries. Although each country is experiencing uncommon inflation pressures. Hence, the fact about the phenomenon of Inflation resides in both positive and negative forms of economic growth. Which perhaps in context of the meaning of Inflation suggested. it is the rate at which the value of a currency is failing and consequential general rise in prices of goods and services.

    As of today the economies of both developed and developing nations are under the weight of Demand Pull Inflation and Cost Pull Inflation. With inadequacy in supply of gas and disruption in meeting demands of certain foods items. The whole world is under the excruciating pains of global energy and food inflation rising cost and demand trend. That is acknowledge as partly caused by the Russians – Ukrainian war.

    For instance,many African countries are facing inflationary pressures with devastating impact on there people. This inflation’s exogenous pressures continue to impact African economies with reference to Ghana 33.9%, Rwanda 20.4%, Uganda 9% and South Africa 7.8% respectively.

    Conversely, aforementioned sub African countries and others in the continent contend chiefly with food Inflation that is taking away meals from homes. At the same time as the leading factor against better nourishments.

    Unfortunately, my dear nation Nigeria, as not being spare from hard nock of inflation. Just recently the country National Bureau of Statistics (NBS) released Consumer Price Index (CPI) report that showed that Nigeria’s CPI rose by 20.52% year-on-year in August 2022. The Consumer Price Index (CPI) and the Whole Sales Price Index(WSPI) are the most commonly used inflation  model. Nevertheless, Nigeria’s latest CPI model showed that Africa’s biggest economy reported a spike in inflation at 20.52% in the month of August 2022. Meanwhile, this latest report indicated inflation is in it seventh months rise trajectory’s. With such high record last witnessed in 2005 at 24.3% highest level,that was 17 years ago.

    However, according to the NBS, the rise in food inflation was caused by increases in prices of bread and cereals, Potatoes, yam and other tuber, fish, meat, oil and fat. 

    The report noted that the average annual rate of food inflation for the twelve-month period ending August 2022 over the previous twelve-month average was 19.02%, which was a 1.48% decline from the average annual rate of change recorded in August 2021 (20.50%). Sadly, what this means is that Nigerians have had to contend with upward trajectories of food inflationary pressures. 

    Critically also the report show that the highest increases in prices of Gas, Liquid fuel, Solid fuel, Passenger transport by road, Passenger transport by Air, fuel and lubricants for personal transport equipment, Cleaning, Repair and Hire of clothing. Have all contributed to the hardship people go through on daily basis.

    This has been a big challenge to Nigerian’s as well as reducing there access to basic food items and limiting them from other non food things.

    With current state of affairs of our nation economy under the sieged of Inflation. How can the Central Bank of Nigeria (CBN) being the authority to monitor,guard and keep Inflation at bar. Save us all from the weight of inflation that is sparing know nation. Even though we acknowledge the fact that inflation is a global phenomenon. Interesting also we can rule out the possibility that nation across the globe are taking deliberate and desperate measures. With a lots of locally suitable ideas to save there people and economy at large. Not envying the current CBN managers. it is our believed that CBN must get it right in it fight against inflation. And for us what becomes clear  from the Apex bank recent monetary policy stance rate of 14% to fight inflation is not working. Rather it compounding the situation with a lots of uncertainty around the value of the naira. 

    Particularly, as the Naira continued to nose dive from 701,706,710 and  to an all-time low of 720 to the dollar.  That erode the purchasing power of citizen on what they can buy. Hence, this persistent currency depreciation as factor in the general increased of cost of production.

    Nevertheless, the CBN is much aware of this that why it has being pushing for greater export so as to earn more forex. Because our import dependence is a disruption to naira stability. However, failing CBN policy intervention and poverty of the Monetary Policy Committee (MPC) rate and tightening measures would not bring inflation figures down, as the issue is structural and influenced mostly by the cost of importing foreign products as well as petroleum products.

    In the light of this revelation, What needs to be done?  As the CBN prepared for it next MPC’s meeting in couple of days from now. With many analyst suggesting for another round of interest hike. Although the World Bank have come out to warn central banks across the world to stop further rate hike that could lead to global recession. For us rate  hike cannot be used to fight Inflation.

    Rather the government needs to formulate and implement complementary monetary and fiscal policies aimed at boosting food supply as well as reducing firm’s cost of production. 

    Another is addressing the issue of insecurity at the farm gates,as well as limiting the excesses of middle men.

    Further more,is the CBN policy target in the export sector through such as the FX200 and other initiatives must be sustain beyond the current apex bank handlers.

    Nigerians are hoping that CBN in its next MPC’s meeting would come out with practical strategic policies to address Inflation conclusively.

  • BREAKING: Inflation Hits 20.52%

    BREAKING: Inflation Hits 20.52%

    The Consumer Price Index (CPI) which measures inflation rose to 20.52 per cent year on year in August compared to 17.01 per cent in the corresponding period in 2021, the National Bureau of Statistics (NBS) said Thursday.

    It said the 3.52 per cent rise indicated that the headline inflation rate increased in August 2022 when compared to the same month in the preceding year.

    According to the CPI report for August 2022, which was posted on the NBS website, food inflation stood at 23.12 per cent on a year-on-year basis in the period under review, which was 2.82 per cent higher than the 20.30 per cent recorded in August 2021.

    However, core inflation, which excludes the prices of volatile ag­ricultural produce stood at 17.20 per cent year on year in August, up by 3.79 per cent when compared to 13.41 per cent recorded in August 2021.

    Details later…

  • Inflation: CBN not doing enough, says Chapel

    Inflation: CBN not doing enough, says Chapel

    The Correspondents’ Chapel of the Nigeria Union of Journalists in Akwa Ibom has said that most policies of the Central Bank of Nigeria, CBN has not done enough to curb rising inflation in Nigeria.

    This is contained in a communique issued Thursday at the end of  a 4-day Retreat of the Chapel in Abuja, on the theme,”2023: In search of a better Nigeria through responsible Joirnalism”

    The Communique jointly signed by Chairman of the Chapel, Comrade Idongesit Ashameri and Chairman of the Communique drafting Committee, Dr Joe Effiong drew strength from a lecture on “The Place of the Media in Shaping Monetary Policies for Better Economy, by Prof. Uche Uwaleke, Chairman, Chartered Institute of Bankers of Nigeria.

    The communique opined  that such policies cannot work in controlling cost-push inflation because of the high cost of production such as diesel, gas, transportation, energy, as well as insecurity.

    It however called on the CBN to ensure prompt release of adequate and timely information to the media but cautioned the media against inflammatory headlines on the economy.

    “That since the extent to which the public understanding of the CBN Monetary Policy is dependent on the quality and quantity of information made available to the media, the CBN should ensure that it provides the media with adequate and timely information for onward distillation to the public.

    “That the media should guard against alarmist or inflammatory headlining of stories on monetary and economic policies of the nation so as not to cause panicky activities in the economy, which could lead to avoidable rise in inflation.

    “That government should stop the practice of taking non concessionary loans based only on assumed windfall, sometimes called miracle money, as such loans are not only illegal and illegitimate, but also have the tendency of mortgaging the future generations of the state to perennial loan servicing.

    “That the fiscal documents of Akwa Ibom State should be domiciled at one location for easy reference instead of the present practice of scattering them to various places like the Budget Office, Ministry of Finance, Accountant General Office, Auditory General Office, etc.

    “That media organizations should live up to the responsibility of training and retraining their staff, especially, journalists instead of leaving such an important activity to NGOs, or staff to train themselves.” The Communique stated.

    Aimed at intellectually and professionally re-equiping  members of the Chapel and other journalists within and outside Akwa Ibom State for the task of effective reportage of the forthcoming general elections in 2023 and beyond, the Correspondents’ Chapel noted sadly that  the refusal or delay in regular payment of media worker’s entitlements has hugely impacted negatively on ethics of Journalism profession. 

    “The refusal or delay in regular payment of media worker’s entitlements does not only amount to abuse and harassment of the workers, but is also a deliberate act to subject such workers to economic insecurity which could engender unethical practice.

    “That Media organization should provide adequate and appropriate security equipment and insurance to their staff covering violent conflict environment

    “That Media organizations should make transparency their watchword by regularly publishing their annual returns as done by other responsible organizations.

    “That journalists should display a high level of professionalism devoid of partisanship, favoritism,   bias in their reportage of the 2023 elections and their fallouts thereof.” It added. 

    Other topics treated at the retreat included among others “The Role of the Media in Budget Tracking, by Tijah Akpan, CEO, Policy Alert and Safety and Security of the Media in a Volatile Environment by CSP Vanderfan James Tersugh (retd).

  • Nigeria’s Inflation Rate Hits 19.64%

    Nigeria’s Inflation Rate Hits 19.64%

    The country’s Consumer Price Index (CPI), which measures the level of price change in goods and services, hit 19.64 percent in July 2022 from the 18.60 percent recorded in the last month.

    This means a 1.82% month-on-month hike, according to the (CPI) report for July 2022 released by the National Bureau of Statistics (NBS) on Monday.

    “On a month-on-month basis, the Headline inflation rate in July 2022 was 1.817 %, which was 0.001% higher than the rate recorded in June 2022 (1.816 %),” the NBS added.

    “The percentage change in the average CPI for the twelve months period ending July 2022 over the average of the CPI for the previous twelve months period was 16.75%, showing a 0.46% increase compared to 16.30% recorded in July 2021.”

    According to the NBS report, the country’s urban inflation increased by 2.08% to 20.09% in July 2022 from 18.01% in July 2021. On the other hand, the rural inflation rate reached 19.22% from 16.75% in the corresponding period of 2021.

    “On a month-on-month basis, the food inflation rate in July was 2.04%, this was a 0.01% insignificant decline compared to the rate recorded in June 2022 (2.05%),” the agency equally noted in its latest report.

    “This decline is attributed to a reduction in the prices of some food items like Tubers, Maize, Garri, and Vegetables.

    “The average annual rate of food inflation for the twelve-month period ending July 2022 over the previous twelve-month average was 18.75%, which was a 1.42% points decline from the average annual rate of change recorded in July 2021 (20.16%).”

    On inflation rates across states in the country, the report added: “In July 2022, all items’ inflation rate on a year-on-year basis was highest in Akwa Ibom (22.88%), Ebonyi (22.51%), Kogi (22.08%), while Jigawa (16.62%), Kaduna (17.04%) and Borno (18.04%) recorded the slowest rise in headline Year-on-Year inflation.

    “However, on a month-on-month basis, July 2022 recorded the highest increases in Adamawa (2.87%), Abuja (2.84%), Oyo (2.77%), while Bauchi (0.82%), Kano (0.83%) and Niger (1.03%) recorded the slowest rise on month-on-month inflation.”

  • Nigeria’s Inflation Rate Hits Five-Year High At 18.60%

    Nigeria’s Inflation Rate Hits Five-Year High At 18.60%

    The consumer price index (CPI), which measures the rate of change in prices of goods and services, hit a five-year record high leapfrogging from 17.71 per cent in May to 18.60 per cent in June 2022.

    The National Bureau of Statistics (NBS) disclosed this in its consumer price index (CPI) report for June 2022, released on Friday.

    Also detailed in the report, were recorded increases in all classifications of individual consumption according to purpose (COICOP) divisions that yielded the headline index.

    “On a month-on-month basis, the headline inflation rate increased to 1.82 per cent in June 2022, this is 0.03 per cent higher than the rate recorded in May 2022 (1.78 per cent),” the report reads.

    The report also revealed that “in the month of June 2022, the urban inflation rate increased to 19.09 per cent (year-on-year); this is a 0.74 per cent increase compared to 18.35 per cent recorded in June 2021.”

    It also said that on a month-on-month basis, the urban inflation rate rose to 1.82 per cent in June 2022, this is a 0.01 per cent increase compared to May 2022 (1.81 per cent).

    The composite food index experienced a similar increase rising to 20.60 per cent in June 2022 on a year-on-year basis; the rate of changes in average price level declined by 1.23 per cent compared to 21.83 per cent in June 2021.

    The rate of changes in food prices compared to the same period last year
    was higher due to higher foods prices volatility caused by COVID 19. This rise in the food index was caused by increases in the prices of Bread and cereals,

    Food products n.e.c, Potatoes, yam, and other tubers, Meat, Fish, Oil and fat, and Wine. On a month-on-month basis, the food sub-index increased to 2.05 per cent in June 2022, up by 0.03 per cent points from 2.01 per cent recorded in May 2022.

    The average annual rate of change of the Food sub-index for the twelve-month period ending June 2022 over the previous twelve-month average is 18.62 per cent, which is 1.10 per cent points decline from the average annual rate of change recorded in June 2021 (19.72 per cent).

    In June 2022, food inflation on a year-on-year basis was highest in Kwara (25.62%), Kogi (24.81%), and River (24.34%), while Jigawa (16.01%), Sokoto (16.24%) and Kaduna (17.75%) recorded the slowest rise in year-on-year food inflation.

    On a month-on-month basis, however, in June 2022 food inflation was highest in Ebonyi(3.52%), Bayelsa (3.27%), and Ondo (3.25%), while Sokoto (0.11%), Taraba (0.94%) and Adamawa (1.22%) recorded the slowest rise on month-on-month inflation.

  • Inflation pushing Nigeria, others to the brink — IMF

    Inflation pushing Nigeria, others to the brink — IMF

    THE International Monetary Fund has said inflation, debt, and forex crisis is pushing the Nigerian economy and other African economies to the brink.

    The Managing Director of the IMF, Kristalina Georgieva, said ministers of finance and central bank governors on the continent disclosed this to her this week.

    She added that most countries on the continent could raise money from the global financial markets and do not have large domestic markets to turn to.

    She stated, “The particularly difficult conditions in many African countries at this moment is important to consider. In my meeting with Ministers of Finance and Central Bank Governors from the continent this week, many highlighted how the effects of this, entirely exogenous, shock was pushing their economies to the brink.

    “The effect of higher food prices is being felt acutely as food accounts for a higher share of income. Inflation, fiscal, debt and balance of payments pressures are all intensifying. Most are now completely shut out from global financial markets; and unlike other regions don’t have large domestic markets to turn to.

    “Against this backdrop, they are calling on the international community to come up with bold measures to support their people. This is a call we need to heed.”

    Georgieva disclosed this in a report titled, ‘Facing a Darkening Economic Outlook: How the G20 Can Respond,’ on the IMF’s website. The report, which was released on Wednesday, is a backdrop to the meeting that G20 ministers and central bank governors will have in Bali later this week.

    According to the MD of the Washington-based lender, the human and economic impact of the war in Ukraine has worsened with commodity price shocks and an increase in cost of living leading to a crisis for hundreds of millions of people.

    She said inflation is now higher than expected and has broadened beyond food and energy prices which has prompted major central banks to announce further monetary tightening.

    She disclosed the fund would downgrade its global growth projection for both 2022 and 2023 in its World Economic Outlook update later this month.

    She explained that it is going to be a tough 2022, and the possibility of a tougher 2023 is quickly materialising.

    Georgieva stated, “It is going to be a tough 2022—and possibly an even tougher 2023, with increased risk of recession.

    “That is why we need decisive action and strong international cooperation, led by the G20. Our new report to the G20 outlines policies that countries can use to navigate this sea of troubles.”