As of June 2022, Nigeria’s inflation rate climbed to 18.60 percent on a year-on-year basis. Representing a 0.85 percent point rise from the rate recorded in June 2021 (17.75 percent). This is according to the recently released Consumer Price Index (CPI) report for June by the National Bureau of Statistics (NBS).
This June inflation rate also shows that the general price levels in Nigeria rose by 1.82 percent point month-on-month when compared to the inflation figure as of May 2022 (17.71). Nigeria’s inflation rate for June 2022, is the highest in the last 5 years as data from the NBS reveals a rate as high as this only as far back as January 2017 (18.72%).
The NBS asserted that the rise in the food index resulted from the prices of some food items like meat, fish, bread and cereals, oil and fat, wine, potatoes, yam, and other tubers.
The urban inflation rate rose to 19.09 percent (year-on-year)–representing a 0.74 percent increase compared to 18.35 percent recorded in June 2021. Similarly, the rural inflation rate spiraled to 18.13 percent in June 2022, this is a 0.97 percent increase compared to 17.16 recorded in June 2021.
The states with the highest all-time inflation on a month-on-month basis in June 2022, are Kogi (2.69%), Ondo (2.65%), and Kaduna (2.61%), while Adamawa (-0.26%), Abuja (-.0.03%) and Sokoto (0.79%) recorded the slowest rise on month-on-month inflation.
The composite food index which captures the price levels for food items also rose to 20.60 percent in June 2022, from 19.50 percent recorded in May 2022. On a month-on-month basis, the food sub-index increased to 2.05 percent in June 2022, up by 0.03 percent points from 2.01 percent recorded in May 2022.
Even though the food inflation rate rose month-on-month, it dropped on a year-on-year basis as NBS data shows that the average food price levels declined by 1.23 percent compared to 21.83 percent in June 2022.
The states with the highest food inflation rates on a month-on-month basis, in June 2022 are Ebonyi (3.52%), Bayelsa (3.27%), and Ondo (3.25%), while Sokoto (0.11%), Taraba (0.94%) and Adamawa (1.22%) recorded the slowest rise on month-on-month inflation.
The core inflation which computationally excludes the prices of volatile agricultural produce, increased to 15.75 percent in June 2022, going up by 0.86 percent and 2.66 percent when compared to the rates recorded in May 2022 (14.90 percent) and June 2021 (13.09 percent) respectively.
According to the NBS, the highest increases were recorded in prices of Gas, Liquid fuel, Solid fuel, Garments, Passenger transport by road, Cleaning, Repair and Hire of clothing, and Passenger travel by Air.
What You Need to Know
The rising inflationary pressures are the ripple effect of the war in Ukraine. In 2021, inflation rates averaged 17 percent, undermining Nigeria’s economic recovery from COVID-19. This sustained rising price level can potentially push more people below the poverty line in Nigeria.
Increasing inflationary pressures exacerbated by the weakening Naira will seriously erode the purchasing power of Nigerians, and hit the vulnerable households in Nigeria the most.
The CPI is the average change over time in the prices of goods and services consumed by people for day-to-day living i.e. it measures the inflation rate.