- Inflation Surges Amid Border Closure
Prices of goods and services surged in the month of September as the effect of border closure crystalises.
The Consumer Price Index (CPI), which measures the inflation rate, increased from 11.02 percent year-on-year in August to 11.24 percent in September, according to the National Bureau of Statistics (NBS) report released on Tuesday.
On a monthly basis, consumer prices rose by 1.04 percent in September, 0.05 percent higher than 0.99 percent recorded in August.
Prior to the recent border closure, headline inflation has been on a consistent downward trend in the last twelve months. However, the decision of President Muhammadu Buhari to close Nigeria’s land borders in an effort to combat smuggling led to a persistent increase in the prices of goods that the country is not self-sufficient.
Last week, traders in local markets said the price of a 50kg bag of rice has risen from around N13,000 and N14,500 in July to between N24,000 and N30,000.
He said, “The 50kg bag of imported rice that we used to sell for about N21, 000 now costs N30, 000. The 50kg bag of local rice that was sold at N16, 000 now costs between N22, 500 and N23, 500.”
Accordingly, the food index rose by 13.17 percent in the month of September, higher than 13.17 percent recorded in August.
On a monthly basis, the index grew by 1.30 percent, a 0.08 percent point higher than 1.22 percent filed in August.
While the border closure has helped curtail smuggling and bolstered revenue generation, it is counterproductive as prices of items/products Nigeria is not self-sufficient continued to surge as traders have started hoarding goods to sell at more higher prices. A move that could hurt the nation’s recent progress.