**Food prices soar to record high
Nigeria’s inflation rate rose to 16.47% (year-on-year) in January 2021 as against 15.75% recorded in December 2020.
Nigeria’s consumer price index, (CPI) which measures inflation increased by 16.47% (year-on-year) in January 2021. This is 0.71% points higher than the rate recorded in December 2020 (15.75%).
This is according to the latest Consumer Price Index report, released by the National Bureau of Statistics.
According to the report, Nigeria’s headline inflation has risen to its highest in over three years while food inflation rose to its highest since July 2008, when it stood at 20.9%.
On a month-on-month basis, the Headline index increased by 1.49% in January 2021. This is 0.12% points lower than the rate recorded in December 2020 (1.61%).
The food index rose sharply to a record high to stand at 20.57% in January 2021 compared to 19.56% recorded in the previous month.
On a month-on-month basis, the food sub-index increased by 1.83% in January 2021, down by 0.22% points from 2.05% recorded in December 2020.
The rise in the food index was attributed to increases in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fruits, vegetables, Fish and Oils and Fats.
The “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 11.85% in January 2021, up by 0.48% when compared with 11.37% recorded in December 2020.
On a month-on-month basis, the core sub-index increased by 1.26% in January 2021. This was up by 0.16% when compared with 1.10% recorded in December 2020.
The highest increases were recorded in prices of Passenger transport by air, Medical services, Hospital services, Passenger transport by road, Pharmaceutical products, Paramedical services.
Others include; Repair of furniture, Vehicle spare parts, Motor cars, Miscellaneous services relating to the dwelling, Maintenance, and repair of personal transport equipment.
Worst hit states
Kogi States led the list of states with the highest inflation rate in January 2021 with 21.38%.
Closely followed by Oyo State with 20.17%, Bauchi (19.52%), Ebonyi (18.74%), and Benue State (18.33%).
On the other hand, Cross River recorded the lowest at 12.22% followed by Abuja (12.94%), Kwara (13.96%), Abia (14.03%), and Enugu (14.26%).
In terms of food inflation, Kogi State also recorded the highest at 26.64%, followed by Oyo State (23.69%).
Others on include; Rivers (23.49%), Benue (22.97%), and Kwara (22.76%).
It is worth noting that in analysing 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.
Meanwhile, the urban inflation rate rose to 17.03% (year-on-year) in January 2021 from 16.33% recorded in December 2020, while the rural inflation rate stood at 15.92% in January 2021 compared to 15.20% recorded in December 2020.
What this means
The rise in the consumer price index indicates that consumers spent more in the month of January compared to December, despite the high spending that December is naturally known for.
This also implies that Nigeria is yet to recover from the caused by the covid induced lockdown as well as the closure of land borders in 2019.