Inflation Defies CBN, Rises To 17-Year High Of 21.09% In October

Nigeria’s inflation rate has hit a record 17-year high of 21.09 per cent, effectively defying the Monetary Policy measures being implemented by the Central Bank of Nigeria to control inflationary pressures.

Figures released by the National Bureau of Statistics on Tuesday showed that inflation in October 2022, rose by 0.32 percentage points from 20.77 per cent recorded in September.

The NBS stated in the report that food inflation also surged to 23.72 per cent in the review month from 23.34 per cent in the previous month, while the core inflation rate rose to 17.76 per cent from 17.6 per cent.

The report stated, “In October 2022, on a year–on–year basis, the headline inflation rate was 21.09 per cent. This was 5.09 percent points higher compared to the rate recorded in October 2021, which was 15.99 per cent.

“This shows that the general price level for the headline inflation rate increased in October 2022 when compared to the same month in the preceding year (i.e., October 2021) by 5.09 per cent.

“On a month-on-month basis, the Headline inflation rate for October 2022 was 1.24 per cent, this was 0.11 per cent lower than the rate recorded in September 2022 (1.36 per cent).

“This means that in October 2022 the general price level for the headline inflation rate (month–on–month basis) declined by 0.11 per cent.”

The NBS blamed the increase in inflation on disruption in the supply of food products, increase in cost of importation due to the persistent currency depreciation, general increase in the cost of production such as increase in energy cost.

On a year-on-year basis, the NBS said in the month of October 2022, the urban inflation rate was 21.63 per cent, stating that this was 5.11 per cent higher compared to the 16.52 per cent recorded in October 2021.

On a month-on-month basis, the urban inflation rate was 1.33 per cent in October 2022, adding that this was a 0.12 per cent decline compared to September 2022 (1.46 per cent).

The Central Bank of Nigeria (CBN) had recently raised the Monetary Policy Rate (MPR) by 150 basis points to 15.5 per cent from 14 per cent to check the rising inflation in the country.

The CBN also raised banks’ Cash Reserve Requirement (CRR) by 750 basis points to a minimum of 32.5 per cent, from 27.5 per cent, in order to mop up liquidity from banks’ vaults and discourage currency speculation. The apex bank, however, left the Liquidity Ratio (LR) unchanged at 30 per cent.

The CBN Governor, Mr. Godwin Emefiele, had said the latest changes were part of the bank’s aggressive effort to rein in inflation, which peaked at 20.52 per cent, year-on-year, in August.

Emefiele had said the MPC was concerned that within a four-month period, inflation had accelerated aggressively by 280 basis points, from 17.7 per cent in May to 20.5 per cent. He said the decision to raise interest rate was unanimously agreed by members of the committee in order to narrow the negative real interest rate gap and hold back inflation.