The Nigerian inflation has continued to rise for the third consecutive time. The consumer price index, (CPI) which measures inflation increased by 11.98 percent (year-on-year) in December 2019. This is 0.13 percent points higher than the rate recorded in November 2019 (11.85) percent.
This is contained in the monthly report for December published on Friday by the Nigerian Bureau of Statistics.
In September, inflation grew by 11.24 percent which was 0.22 percent points higher than the rate recorded in August 2019 (11.02) percent. This figure increased in October after it rose by 11.61 percent (year-on-year) which was 0.36 percentage points higher than the rate recorded in September.
The November increase of the consumer price index was by 11.85 percent (year-on-year); 0.24 percent points higher than the rate recorded in October
Analysts continued to attribute the rising inflation to the closed border probably aggravated by other factors such as the yuletide season as it is attributed for the increase in December.
The closure of border has continued to impact on the cost of food items and will probably see another increase for January.
The December report have it that Increases were recorded in all COICOP divisions that yielded the Headline index.
On month-on-month basis, the Headline index increased by 0.85 percent in December 2019, this is 0.17 percent rate lower than the rate recorded in November 2019 (1.02) percent.
The NBS further said that the percentage change in the average composite CPI for the twelve months period ending December 2019 over the average of the CPI for the previous twelve months period was 11.40 percent, showing 0.05 percent point from 11.35 percent recorded in November 2019.
The urban inflation rate increased by 12.62 percent (year-on-year) in December 2019 from 12.47 percent recorded in November 2019, while the rural inflation rate increased by 11.41 percent in December 2019 from 11.30 percent in November 2019.
On a month-on-month basis, the urban index rose by 0.90 percent in December 2019, down by 0.17 from 1.07 percent recorded in November 2019, while the rural index also rose by 0.82 percent in December 2019, down by 0.16 from the rate recorded in November 2019 (0.98) percent.
The corresponding twelve-month year-on-year average percentage change for the urban index is 11.83 percent in December 2019. This is higher than 11.75 percent reported in November 2019, while the corresponding rural inflation rate in December 2019 is 11.00 percent compared to 10.98 percent recorded in November 2019.
It is quite clear and as expected that our borders have had significant impact on the economy of Nigeria whether judged negative or positive going by the level it has affected the rate of inflation in the country.
The December report said food inflation rose by 14.67 per cent in December compared to 14.48 per cent in November and is due to the increases in prices of bread and cereals, meat, fish, oils and fats, potatoes, yam and other tubers.
With products like rice (cereal) and frozen fish particularly now in limited supply resulting to increase in their prices and with regard to level of dependence on the food items, the rise in inflation may not subside in the closest view.
Also, with the increased spending on the unavoidable food items and other ones that usually comes through the border such as canned tomatoes, spaghetti, apple, milk, and others, Nigerians will have to continue to experience the rising prices.
However, with the expected result of stimulating local production, the rising prices may not be considered as a cogent reason to hastily reopen the border as can be deduced from discuss by economic managers and supporters of the border closure.
On the other hand, the rising inflation if allowed to continue, at some point, will begin to negatively impact on the purchasing power of consumers with its attendant unacceptable effect on the overall GDP which at the end of the whole equation will limit the expected benefit of the policy.
The Federal fiscal policy implementation with particular reference to the 2020 budget implementation is strongly advised to further stimulate private sector economic production on other areas to support the gains being made on the rice production drive which stand as the fulcrum of the policy.