This is according to the recently released Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS).
The inflation rate in Nigeria rose for the fifth time in a row in May, after the rate declined to 21.34 per cent in May 2022. Inflation continues to rage at an over 17-year high despite contractionary monetary policies by the Central Bank of Nigeria (CBN).
On a month-on-month basis, the headline inflation rate in May 2023 was 1.94 per cent, which was 0.03 per cent higher than the rate recorded in April 2023 (1.91 per cent). This means that in May 2023, on average, the general price level was 0.03 per cent higher relative to April 2023.
Food and non-alcoholic beverages (11.61 per cent) contributed the most to the rise in the inflationary pressure, followed by housing water, electricity, gas and other fuel (3.75 per cent), and clothing and footwear (1.71 per cent).
The Food inflation rate rose to 24.82 per cent in May 2023, representing a 0.21 per cent point increase from 24.61 per cent recorded in the previous month and 5.3 per cent points higher than 19.5 per cent recorded in the corresponding period of 2022.
On a month-on-month basis, the Food inflation rate in May 2023 was 2.19 per cent, this was 0.06 per cent higher compared to the rate recorded in April 2023 (2.13 per cent).
The average annual rate of Food inflation for the 12 months ending May 2023 over the previous 12 months average was 23.65 per cent,
The rise in food inflation on a year-on-year basis was caused by increases in prices of Oil and fat, Yam and other tubers, Bread and cereals, Fish, Potatoes, Fruits, Meat, Vegetable, and Spirits.
The “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 20.06 per cent in May 2023 on a year-on-year basis; up by 5.16 per cent when compared to the 14.90 per cent recorded in May 2022.
On a month-on-month basis, the Core inflation rate was 1.81 per cent in May 2023. It stood at 1.46 per cent in April 2023, up by 0.35 per cent.
The average 12-month annual inflation rate was 18.33 per cent for the twelve months ending May 2023.
The highest increases were recorded in gas prices, passenger transport by air, Liquid fuel, vehicle spare parts, fuels and lubricants for personal transport equipment, medical services, and passenger transport by road.
Nigeria’s inflation rate continues to increase further on the back of the surge in energy and food prices, coupled with the cash crunch experienced in the first quarter as a result of the new naira redesign by the CBN.
The rate has remained high despite measures by the monetary authorities to clamp down on inflation by increasing interest rates to as high as 18.5 per cent in May 2023.
Meanwhile, inflation is expected to continue its upward trend through the year, following the announcement of the removal of petrol subsidies and the adjustment of the FX rate at the official market. (Source: nairametrics)
