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Nigeria’s Inflation Rate Declines to 17.01 Percent in August 2021

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Lagos Nigeria - Investors King

Prices moderated further in Africa’s largest economy, Nigeria, in the month of August despite rising costs and growing economic uncertainties.

Consumer Price Index (CPI), which measures the inflation rate, grew by 17.01 percent year-on-year in August 2021, representing a 0.37 percent decrease when compared to the 17.38 percent recorded in the month of July 2021.

On a monthly basis, the inflation rate increased by 1.02 percent in August 2021, slightly high by 0.09 percent than the 0.93 percent filed in July, the National Bureau of Statistics (NBS) stated in its latest report.

Prices of goods and services continued to drop on paper in recent months even as prices are hitting record highs across most sectors in Nigeria.

Naira has plunged to a record low against the United States Dollar and other global currencies following the Central Bank of Nigeria’s decision to halt the sale of forex to Bureau De Change Operators in an effort to curb illicit financial flows and forex supplies to the black market.

Naira plunged to N560 per United States Dollar at the black on Wednesday to set a new record low against the greenback and subsequently dragged on the cost of import goods and the profit of import-dependent businesses.

Food Index also rose at a slower pace in August 2021 even with Nigerians complaining of over 50 percent increase in the price of food items. The food composite index rose by 20.30 percent in August, at a slower pace when compared to 21.03 percent recorded in the month of July 2021.

The rise in the food index was caused by increases in prices of Bread and cereals, Milk, cheese and egg, Oils and fats, Potatoes, yam and other tubers, Food products n.e.c, Meat and Coffee, tea and cocoa, according to the NBS report.

On a monthly basis, the food sub-index grew by 1.06 percent in August 2021, representing an increase of 0.20 percent from 0.86 percent filed in the month of July 2021.

Looking at a more stable food index gauge, the twelve-month period ending August 2021 over the previous twelve-month average, the food index increased by 0.34 percent from 20.16 percent achieved in July 2021 to 20.50 percent in August 2021.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

2025: The End of Gas Flaring

The Federal Government through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has inaugurated a 12-member ‘Gas Flare Commercialization Program Team’ to manage the nation’s gas flaring.

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gas flaring

The Federal Government through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has inaugurated a 12-member ‘Gas Flare Commercialization Program Team’ to manage the nation’s gas flaring.

According to Engineer Gbenga Komolafe, the Chief Executive of NUPRC, gas flaring in the oil gas industry has been a continuous menace that needs to be eradicated because of its adverse effect on the people’s health, the Environment and also a major resource waste and value erosion to the country.

Gbenga mentioned that to monetize gas resources is to take a positive step toward securing energy security, especially in this period of global energy transition. He said as a nation, Nigeria needs to ensure it harnesses every available gas resource in other to create value.

He declared that the NUPRC is resuming the procedure of issuing flare sites to competent technical companies, after a complete bidding process.

This process is crucial and important in respect of the direction of the federal government’s policy to ensure every gas resource is properly developed for national development.

He laid emphasis that the wasteful disposal of natural gas is not only hazardous with serious health and environmental consequences but also a waste of resource and value to Nigeria.

In addition to this, he stated that the FG declared the period 2021 to 2030 as the DECADE OF GAS, a period which the country must change direction from oil centered exploitation to a gas-focused industrial development.

Although the World Bank has set 2030 as the target year to end gas flaring, Nigeria has set the country’s deadline tp 2025.

President Muhammadu Buhari made a commitment towards the Paris Agreement during the COP26 Leaders’ Summit to achieve Net Zero carbon emissions by 2060,” he said.

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Economy

China Reaffirms Commitment to Maintaining Cooperation With Africa

Wu- Peng, has reaffirmed China’s commitment to maintaining cooperation with Africa

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China Nigeria

The director general of the ministry of foreign affairs of China, Wu- Peng, has reaffirmed China’s commitment to maintaining cooperation with Africa.

Wu-Peng disclosed this at a meeting held with African journalists under the auspices of the China Africa Press Centre (CAPC) in June 2022 in Beijing.

Quoting the president of China, Xi Jinping, Wu-Peng said China will work hand in hand with African countries to implement linked programs in the next three years”.

According to Wu-Peng, this includes programs related to the medical and health sector, poverty alleviation, agricultural growth and promoting investments.

We’re still fighting to contain Covid-19 since the outbreak of the pandemic, China has so far provided about 260 million doses of vaccines to 55 African countries and African Union,” the Director General said.

He also mentioned that China had also made provision for about 120 batches of emergency supplies to African countries and they all have diplomatic relations with China and also contributed to Africa’s early recovery from the Covid-19 pandemic.

China has already constructed the African CDC in Addis Ababa and it will be completed in 2023.

The other program I would like to make mention is the agricultural sector. When FOCAC was held in 2021, there was no Russia-Ukraine crisis, yet we focus and invested in Agriculture in Africa.

The reason been, we believe in the potential of Agriculture in Africa, the growth and development is huge, there are still lots of arid land in Africa, Wu-Peng stated.

Unfortunately, Africans still have to import grapes from the outside which costs a lot of currency and actually damages Africa’s international balance sheet.”

He said that the failure to prioritize agriculture could obstruct fast economic growth in Africa, suggesting that more should be done through Public Private Partnership (PPP) to ensure food security.

The director general laid emphasis on the need for proper implementation of the report from the FOCAC meetings to bring to life the realization of set goals and objectives.

“This does not make sense, you have lands, you have labor forces, I think we just need the right policy to promote price investments in industrial large scale farms to improve our food security.

Why this is has become very important is due to the Ukraine crisis, food prices globally surged and going forward, we must finish construction of the project in the nearest future.

African governments have already noticed developments of agriculture is a huge priority to deal with the crisis of hike in food prices, we want Africas countries to have up to date plans from FOCAC meetings and the findings of the results.

“Usually, when we have FOCAC meetings we just produce documents, we need more concrete actions, we must be focused,” the director general said.

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Economy

Inflation Rises to 17 Year High in Nigeria

Inflation rate, grew at a 19.64% rate in July, the highest since September 2005 when inflation peaked at 24.32%

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consumer prices

Prices of goods and services rose to a 17-year-high in Africa’s largest economy Nigeria in the month of July, the National Bureau of Statistics (NBS) reported on Monday.

The Consumer Price Index (CPI), which measures the inflation rate, grew at a 19.64% rate in July, the highest since September 2005 when inflation peaked at 24.32%. This was 1.04% higher than the 18.60% recorded in June 2022.

On a monthly basis, inflation expanded by 1.817%, an increase of 0.001% from 1.816% filed in June 2022.

As expected, food inflation also grew by 0.99% from 21.03% year-on-year in July 2021 to 22.02% in July 2022. According to NBS, the increase in the food sub-index was caused by increases in prices of Bread and cereals, Food products n.e.c, Potatoes, yam and other tubers, meat, fish, oil, and fat.

On a month-on-month basis, the food inflation rate in July was 2.04%, this was a 0.01% insignificant decline compared to the rate recorded in June 2022 (2.05%). This decline is attributed to a reduction in the prices of some food items like Tubers, Maize, Garri, and Vegetables.

Rising economic uncertainties amid a series of policy changes like the increase in duty on imported raw materials, high electricity tariffs,  fuel, etc needed to manufacture the necessary food items are responsible for the persistent increase in inflation.

Also, the extended decline in the value of the Nigerian Naira against its global counterparts has made foreign goods or imported goods expensive for Nigerians. Therefore, manufacturing companies are now passing the increase to final consumers already struggling with low earnings and a high unemployment rate.

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