The headline inflation rate in Nigeria has reached its greatest peak of 20.77 percent since 1998, which has resulted in an increase in discontent and a decline in the country’s standard of life.
This comes as a result of the hyperinflation rate, the devaluation of the value of the Naira, the loss of buying power, and the growing unemployment rate, all of which face citizens with challenging economic situations.
On Monday, statistics were made public by Nigeria’s National Bureau of Statistics (NBS), which indicated that the country’s headline inflation rate had jumped to 20.77 percent year-on-year in September 2022.
This information was provided in a statement that was released on Monday in Abuja by Prince Semiu Adeniran, who serves as both the Statistician-General of the Federation and the Chief Executive Officer of the National Bureau of Statistics (NBS).
This comment was made in reference to the Consumer Price Index (CPI) and the Inflation Report for the month of September.
When compared to the 16.63 percent that was reported in September 2021, the figure that was published represents a 4.14 percentage point increase.
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According to what was said in the paper, “This suggests that in September 2022, the overall price level was 4.14 percent higher in comparison to September 2021.”According to the research, the causes responsible for the increase in the annual inflation rate include an interruption in the supply of food goods, an increase in the cost of imports as a result of the continuing currency depreciation, and an overall increase in the cost of production.
The headline inflation rate in September was 1.36 percent, which was 0.41 percent less than the rate that was reported in August 2022 at 1.77 percent. This represents a month-over-month decrease in inflation of 0.41 percent.
According to a portion of the study, “This indicates that in September 2022, the headline inflation rate on a month-on-month basis decreased by 0.41 percent, relative to August 2022.”
A slowdown in the pace of change in the food index was the primary contributor to the reduction in the annualized rate of inflation seen over the course of the last two months.
This is related to the reference month index, as stated in the report, and the reason for this is that the harvest season is currently underway.
The percentage change in the average CPI for all items index for the 12 months ending September 2022 over the average of the CPI for the previous 12-month period was 17.43 percent. This change was due to the fact that the CPI for the previous 12 months averaged higher than the CPI for the current period.
According to the findings of the survey, “This is indicating a 0.60 percentage point rise compared to 16.8percentage points reported in September 2021.”
Every single division that contributed to the Headline index of the Classification of Individual Consumption by Purpose (COICOP) saw an increase in their respective totals.
In September 2022, the food price sub-index showed a year-over-year growth rate of 23.34 percent, which was 3.77 percent higher than the rate that was recorded in September 2021 (19.57 percent), when that rate was reported.
According to the findings of a recent study, “This increase in food inflation was driven by an increase in prices of bread and cereals, food items, potatoes, yam, and other tubers, oil, and fat.”
The annualized rate of inflation for food was 1.43 percent in September, compared to the previous month’s rate. When compared to the rate that was reported in August 2022, which was 1.98 percent, this was a decrease of 0.54 percent.
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The drop might be ascribed to a decrease in the pricing of some food commodities, such as tubers, palm oil, maize, beans, and vegetables.
The annual rate of inflation for food was 19.36 percent on average for the 12 months that ended in September 2022, compared to the average for the previous 12 months.
According to what was said in the paper, “this was a reduction of 1.35 percentage points from the average annual rate of change reported in September 2021 at 20.71 percentage points.”
The consumer price index for urban consumers had a year-over-year increase of 4.06 percentage points in September 2022.
This means that the urban inflation rate in September 2022 was higher by 21.25 percent compared to the 17.19 percent reported in September 2021.
According to the Bureau’s report, “On a month-on-month basis, the urban inflation rate was 1.46 percent in September 2022.” This represented a decrease of 0.34 percent when compared to August 2022’s rate of 1.79 percent.
When compared to the 17.41 percent figure that was published for September 2021, the equivalent 12-month average for the urban inflation rate was 17.94 percent in September 2022. This represents a 0.53 percent rise from the 17.41 percent figure that was reported in September 2021.
When measured on a year-over-year basis, the rate of inflation for rural consumers in September 2022 was 20.32 percent, which was 4.24 percent higher than the 16.08 percent that was reported in September 2021.
According to the Bureau, “On a month-on-month basis, the rural inflation rate in September 2022 was 1.27 percent,” which is a decrease of 0.48 percent when compared to August 2022’s rate of 1.75 percent.
When compared to the 16.26 percent figure that was reported in September 2021, the equivalent 12-month average for the rural inflation rate in September 2022 was 16.94 percent, indicating a 0.68 percent rise over the previous year’s figure of 16.26 percent.
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The annualized inflation rate for all goods and services in September 2022 was greatest in Kogi State, at 23.82 percent, followed by Rivers State, at 23.49 percent, and Benue State, at 22.78 percent, according to the profiles of the States.
According to the Bureau’s findings, “The States with the slowest growth was Abuja with 17.87 percent followed by Borno with 18.12 percent and Adamawa with 18.42 percent.”
The State all items index for September 2022 reported the highest rate in Jigawa at 2.58 percent, followed by Yobe at 2.22 percent and Benue at 2.05 percent. This was the case on a month-to-month basis.
According to the research, “The States with the slowest growth was Abuja at -0.72,” followed by “Sokoto with -0.19 percent and Adamawa with 0.25 percent.”
In response to the recent event, the Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said in an interview with the press on Monday stated that the Federal Government should adopt a flexible foreign exchange policy as well as review the import policy for certain foods.
According to him, “the increasing inflationary pressures in the economy of Nigeria continue to be a serious reason for worry.” [citation needed] In September, headline inflation rose to 20.77 percent from 20.52 percent in August. This marks an acceleration in price growth. The year-over-year increase in the price of food continued unabated, reaching 23.34 percent in September.
The primary factors that cause inflation have not shown any signs of abating; in fact, they have gotten considerably more pronounced. These causes include a weakening currency rate, increased transportation costs, problems in logistics, illiquidity in the forex market, an increase in the cost of diesel, climate change, and insecurity in many rural areas as well as structural impediments to production. Essentially, these are problems with the supply side.
“The increased expansion in fiscal deficit financing by the Central Bank of Nigeria (CBN) is boosting liquidity in the economy and has a deep effect of fuelling inflation. This is having an adverse impact on the country’s economic growth. It is now on the verge of reaching N20 trillion at this point.
“The Central Bank of Nigeria’s (CBN) funding of the budget deficit has reached alarming proportions, which has enormous repercussions for the expansion of the money supply and the influence that this has on inflation.” The tax is based on inflation.
“Elevated inflationary pressures decrease the buying power of people as real earnings are lost, which raises the incidence of poverty, exacerbates the pressure on production costs, has a negative impact on profitability, erodes shareholders’ value, and weakens investors’ trust.
“In the vast majority of instances, increases in the cost of manufacturing cannot be passed on to the customers. The inference is being made that manufacturers are also feeling the effects of this. This is particularly evident in contexts where there is elasticity in the demand for the product.
“Combatting inflation calls for immediate involvement on the part of the government to address the difficulties facing the supply side of the economy and the mitigation of the monetization of the budget deficit,”
“In order to alleviate some of the pressure that is being placed on manufacturers, the government should adjust the tariff laws so that industrialists are eligible for reduced import duties on intermediate items.
“In light of the current economic situation, it is of the utmost need to conduct a review of the import policy on certain food goods in order to offer some relief to the populace, which is suffering from severe poverty. The Central Bank of Nigeria (CBN) needs to implement a policy of flexible exchange rates in order to alleviate the severe lack of foreign currency in the economy.
Mr. Idakolo Gbolade, a specialist in financial inclusion and wealth management and the managing director and chief executive officer of SD & D Capital Management Limited, stated that the efforts put up by the CBN to moderate inflation are not constructive.
In his own words, he said, “The ongoing rise in inflation is predicted since actions implemented by the CBN have not helped to relieve inflation and factors driving the inflationary trend have not lessened.” [citation needed] Because of this, the foreign reserves do not have enough money to pay for imports for up to one month.
“The value of the Naira has continued to decline in comparison to the U.S. Dollar due to the fact that Nigeria is not getting a sufficient amount of money in Dollars to be able to intervene in an acceptable manner to stem the wild slide of the Naira.
Because of the increase in borrowing rates, many firms have reduced their output, hence productivity has not grown as a result.
“The crude output level is still hanging around 1 million barrels per day, and the importation of refined petroleum products is using up a lot of Foreign Exchange, which is having an effect on other vital sectors. According to him, the economic situation would get much worse as a result of the current fiscal policies of the government and the projected increase in borrowing.
As a response, Dr. David Kayode Ehindero, Executive Director of the Nigerian Workforce Strategy and Enlightenment Centre (NIWOSEC), stated that the rise in the inflation rate from 20.52 percent in August 2022 to 20.77 percent in September is concerning and dangerous to the economy.
He emphasized that the Federal Government, through the Central Bank, must promptly take significant steps to combat the inflation rate before the nation enters a recession. These actions must be taken before the country enters a recession.
Dr. Ehindero emphasized that the adoption of a fiscal policy such as a higher income tax should be decreased, and that tax waiver is an option for supply companies that want to cut the price of the commodities they offer.
According to him, the Central Bank of Nigeria (CBN) should implement rigorous regulations to curb the circulation of dollars in the foreign exchange market and encourage indigenous enterprises to engage in export operations.
He stated that all levels of government, including local, state, and federal, should work together with the federal government to combat the threat posed by criminals, including those who steal oil.
As soon as it was made public that there was inflationary pressure, Nigerians flocked to Twitter to voice their dissatisfaction with the state of the economy. They bemoaned the plague of hyperinflation, the deterioration of the Naira, and the growing jobless rate.
A user named @kenzorash: Stagflation voiced their opinion about the matter on Twitter, stating, “Nigeria could be utilized as case studies to research stagflation! What are some of the advantages of stagflation? At this very time, the only thing that comes to mind is a drop in confidence from international investors. ”
A Twitter user named @EcoStructEngr expressed their dismay by tweeting the following: “The unemployment rate is 33%, the dollar is currently worth roughly N740, and inflation is 20.77%.” People are putting their homes up for sale in order to get the money necessary to pay the ransom demanded by kidnappers as the flood continues to take lives and damage property. The actual disaster for Nigeria was caused by Buhari.
A user named @mbaka paschal tweeted the following about the impact of the deterioration of the value of the Naira in the context of growing inflation: “Saving money these days is one of my least favorite things to do. But cash is king, and you need it at all times. You can’t get by without it.
Checked out the current rate of inflation in Nigeria, and it’s above 20%. Your one million dollars is now worth 800 thousand dollars on paper, but in reality, over the previous year, it has been worth less than half a million dollars.
According to the tweets of @dennitedane, “At this time of Energy and food inflation Crisis in the world, Nigeria’s Natural Resources and vast Land Economy Should be in the top 10 in the world right now but Incompetent and bad leadership is holding us down to the bottom.” [Tweet] “At this time of Energy and food inflation Crisis in the world Nigeria’s Natural Resources and vast Land Economy Should be top 10 in the world right Look at the economic plans proposed by @PeterObi, and then say “God Abeg.”
A user on Twitter under the handle @AhonkhaiOmo, who was concerned about the increasing rate of inflation, stated the following: “Before this regime, 12.5 kilograms of cooking gas did not cost more than five thousand” (N5,000). Right now, it’s above ten thousand (N10,000) (gas that we have in Nigeria).
Both our inflation and our unemployment rates are currently among the highest that can be found anywhere in the globe. Our government obtains funds by borrowing rather than the production of any goods or services. Our money has no value.”