By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s inflation rose in February to 8.4 percent year-on-year (y/y), representing a 0.2 percent increase from 8.2 percent recorded in January 2015, the latest report from the National Bureau of Statistics (NBS) said on Tuesday.
According to the statistics office, Nigeria’s Consumer Price Index (CPI) during the period shows that food prices as observed by the food sub-index increased at a faster pace in February partly driven by increases in prices of imported food items.
“The Imported food sub-index increased by 8.8 percent (year-on-year), the highest increase recorded since February 2013. The Food sub-index rose by 9.4 percent (year-on-year), 0.2 percentage points from January,” the report affirmed.
The NBS says after increasing at the same pace (year-on-year) for the previous two (2) months (9.2 percent), food prices as measured by the Food sub-index increased at a faster pace in February; increasing by 9.4 percent.
It added on a month-on-month basis, food prices increased at a slower rate in February relative to January. “Food prices increased by 0.7 percent down from 0.9 percent. Price increases slowed across most groups that contribute to the Food sub-index with the exception being the Fish group,” the report affirmed.
The statistics office disclosed that on a month-on-month basis, the highest price increases were recorded in the Fish, Meat, Vegetables and “Potatoes, Yams and Other Tubers” groups. The average annual rate of change of the Food sub-index for the twelve-month period ending in February 2015 over the previous twelve month average was 9.5 percent. The twelve month rate of change has held steady for nine (9) consecutive months.
“The continued uptrend in the Headline inflation year-to-date mirrors our conservative float range of 9.5 percent and 10 percent, for the 2015 fiscal year,” Cordros analysis affirmed.
Cordros said with the recent indirect devaluation of the Naira (following the closure of official market transactions), a number of Nigerian manufacturers and service providers currently face the trade-off between passing on extra costs to consumers or reducing profit margins. “The prices of imported food and non-food items are equally adjusting to the increased costs of purchasing the USD. Risks to the NGN/USD stability and the impact on commodities/services remain strong, considering possibilities of poorly-managed general elections and weaker oil prices,” it added.
Cordros further affirmed that consumers’ resistance to price increases (as reported by some local producers) as well as the hawkish stance of both the monetary and fiscal authorities could however moderate inflationary pressures.
