Nigeria’s Annual Inflation Rate Rises To 12.26% In March As Recession Looms

Nigeria's Annual Inflation

Inflation figures for March 2020 released by the National Bureau of Statistics (NBS). Nigeria’s headline inflation accelerated to 12.26% YoY (0.84% MoM). This is 0.06 percent points higher than the rate recorded in February 2020 (12.20) percent.

The lockdown in Abuja, Lagos and Ogun States and various major disruptions in normal economic activity in several States since then,  started in April 2020 and accordingly would not have any major impact on March 2020 Inflation which this report focusses on.

– Food inflation rose by 8 bps to print 14.98% YoY (February 2020: 14.90% YoY)
– Core inflation advanced by 30 bps to 9.73 % YoY (February 2020: 9.43% YoY)
– Urban inflation rose by 8 bps to 12.93% YoY. Similarly, Rural inflation climbed by 3 bps 11.64% YoY

On a month-on-month basis, the Headline index increased by 0.84 percent in March 2020. This is 0.05 percent higher than the rate recorded in February 2020 (0.79 percent).

The percentage change in the average composite CPI for the twelve months period ending March 2020, over the average CPI for the previous twelve months period was 11.62 percent, showing 0.08 percent point from 11.54 percent recorded in February 2020.

The urban inflation rate increased by 12.93 percent (year-on-year) in March 2020 from 12.85 percent recorded in February 2020, while the rural inflation rate increased by 11.64 percent in March 2020 from 11.61 percent in February 2020.

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On a month-on-month basis, the urban index rose by 0.88 percent in March 2020, up by 0.06 from 0.82 percent recorded in February 2020, while the rural index also rose by 0.80 percent in March 2020, up by 0.04 points from the rate recorded in February 2020 (0.76 percent).

The corresponding twelve-month year-on-year average percentage change for the urban index was 12.15 percent in March 2020 (this is higher than 12.03 percent reported in February 2020), while the corresponding rural inflation rate in March 2020 was 11.14 percent compared to 11.09 percent recorded in February 2020.

The current reading is 6bps ahead of the February 2020 reading, with material pressure from the core inflation sub-index (+30 bps) this month.

Food Index

The composite food index rose by 14.98 percent in March 2020 compared to 14.90 percent in February 2020.

This rise in the food index was caused by increases in prices of Bread and Cereals, Fish, Potatoes, Yam and other tubers, Oils and fats, Vegetables, and Fruits.

On a month-on-month basis, the food sub-index increased by 0.94 percent in March 2020, up by 0.07 percent points from 0.87 percent recorded in February 2020. 

The average annual rate of change of the Food sub-index for the twelve-month period ending March 2020, over the previous twelve-month average was 14.11 percent, 0.13  percent points from the average annual rate of change recorded in February 2020 (13.98) percent.

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All Items Less Farm Produce

The “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 9.73 percent in March 2020, up by 0.3 percent when compared with 9.43 percent recorded in February 2020.

On a month-on-month basis, the core sub-index increased by 0.80 percent in March 2020. This was up by 0.07 percent when compared with 0.73 percent recorded in February 2020.

The highest increases were recorded in prices of Passenger transport by air, Tobacco, Household textiles, Major household appliances, Domestic services, and household services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Water supply, and Catering services.

The average 12-month annual rate of change of the index was 9.11 percent for the twelve-month period ending March 2020. This is 0.02 percent points higher than 9.09 percent recorded in February 2020.

State Profiles

In analyzing price movements under this section, note that the CPI is weighted by consumption expenditure patterns which differ across states. Accordingly, the weight assigned to a particular food or non-food item may differ from state to state making interstate comparisons of consumption basket inadvisable and potentially misleading.  

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All Items Inflation

In March 2020, all items inflation on year on year basis was highest in Bauchi (15.55%), Niger (14.04%) and Kebbi (13.90%), while Lagos (10.82%), Abuja (10.19%) and Kwara (9.94%) recorded the slowest rise in headline Year on Year inflation.

On month on month basis, however, March 2020 all items inflation was highest in Bayelsa (1.64%), Bauch (1.63%) and Ondo (1.60%), while Kano (0.21%), Abia (0.17%), recorded the slowest rise on the month on month inflation with Lagos recording price deflation or negative inflation (general decrease in the general price level or negative inflation rate).

Food Inflation

In March 2020, food inflation on a year on year basis was highest in Sokoto (16.81%), Edo (16.63%) and Ogun (16.39%), while Jigawa (13.69%), Bauchi  (13.40%) and Lagos (13.06%) recorded the slowest rise.

On month on month basis, however, March 2020 food inflation was highest in Bayelsa (2.36%), Kogi (2.18%) and kebbi (2.17%), while Kano (0.22%), Cross River (0.09%) recorded the slowest rise on the month on month inflation with Lagos recorded price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate).

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