Inflation Hits 14.89 Percent in November Amid Insecurities, High Foreign Exchange Rate

Rising cost of goods and services amid insecurities and currency devaluation has pushed headline inflation in Africa’s largest economy to a record-high in the month of November.

The Consumer Price Index (CPI), which measures inflation rate, rose by 14.89 percent in November, according to the National Bureau of Statistics (NBS) report released on Tuesday.

This was 0.66 percent faster than the 14.23 percent recorded in the month of October.

NBS noted that price increases were recorded across the board with the monthly headline index increasing by 1.60 percent in the month under review, representing an increase of 0.06 percent higher than the 1.54 percent posted in October.

Food Index rose by 18.30 percent in November, up from 17.38 percent in October. Increases were recorded in Bread and cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits, Vegetables and Oils and fats.

“On month-on-month basis, the food sub-index increased by 2.04 percent in November 2020, up by 0.08 percent points from 1.96 percent recorded in October 2020,” the report stated.

“The average annual rate of change of the Food sub-index for the twelve-month period ending November 2020 over the previous twelve-month average was 15.75 percent, 0.33 percent points from the average annual rate of change recorded in October 2020 (15.42 percent).”

Insecurities in certain parts of the country have prevented farmers from going to their farms. This coupled with the recent flooding that eroded rice harvest plunged food availability and subsequently increased prices of the few available food items.

Also, the wide foreign exchange rate when compared to global counterparts has made imported goods expensive and practically unaffordable due to the weak household income and the negative impact of COVID-19 on Nigerians.

The Central Bank of Nigeria (CBN) devalued the Naira against the United States Dollar for the third time this year in November and immediately adjust diaspora remittance policy to further ease scarcity and aid economic recovery.

However, with diaspora remittance dropping to a record-low of $3.35 billion in the second quarter, the new policy may not crystalised until the second half of 2021.