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U.S. Inflation Rises to 30 Year high in October

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The price of goods and services rose to a 30-year high in the world’s largest economy the U.S in the month of October, according to the latest data released by the Labor Department on Wednesday.

Consumer Price Index, which measures inflation rate, rose from 5.4 percent year-on-year filed in September to 6.2 percent year-on-year in October. The increase was the largest since December 1990.

On a monthly basis, inflation rose by 0.9 percent in October, faster than the 0.4 percent recorded in September and above 0.4 percent predicted by economists interviewed by Reuters.

The increase was a result of rising energy costs caused by global supply constraints, an increase in consumer demand worsened by logistic disruption, and the inability of companies to lure desirable expertise back to work after stimulus payment from the government.

The increase was “broad-based, with increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles among the larger contributors”, the labor department said. “The energy index rose 4.8% over the month, as the gasoline index increased 6.1% and the other major energy component indexes also rose. The food index increased 0.9% as the index for food at home rose 1%.”

Last week when the Fed announced tapering commencement, Fed Chair Jerome Powell said inflation had been “longer lasting than anticipated”. However, he said the central bank still expected price increases to be “transitory” even though it was “very difficult to predict the persistence of supply constraints or their effects on inflation”.

The report shows prices rose across the board with the cost of clothes, car parts, shelter, energy, food and lawnmowers all rising. The energy index grew by 30 percent in the last 12 months, worsening the situation of many Americans and adding to the fear it could derail the ongoing progress. The food index also rose by 5.3 percent in the last 12 months.

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

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Economy

Nigerians Struggle as Sachet Water Prices Hit Record Highs Amidst Economic Hardship

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As economic challenges persist in Nigeria, citizens face yet another hurdle of soaring prices of sachet water, a vital source of drinking water for many.

Sachet water, colloquially known as ‘pure water,’ served as a convenient and inexpensive option for hydration, with prices starting at N5 in the early 2000s.

However, over the years, the cost has steadily climbed to as high as N50 per sachet.

This exponential increase has forced many Nigerians to seek alternative sources of water, including boreholes and wells, despite concerns about their safety.

Residents across the country, from Lokoja to Abuja, lament the financial strain caused by the inflated prices.

Marvelous Sanni, a resident of Lokoja, recounts how a bag of sachet water, once priced at N200, now sells for N400 to N500.

Families like hers have been compelled to turn to borehole water, raising questions about sanitation and health risks.

The situation is dire for households like that of Margret Danjuma in Abuja, who can no longer afford the daily consumption of sachet water.

Resorting to purchasing water from boreholes, Danjuma reflects the broader struggle faced by many Nigerians in securing clean and affordable drinking water amidst economic turmoil.

Local businesses, too, feel the pinch, with some restaurants discontinuing the provision of water to customers or resorting to unconventional methods like selling water in nylon bags.

The Association of Pure Water Producers attributes the price surge to rising production costs, including the cost of materials and treatment.

Experts and consumer protection agencies express concern over the unjustifiable price hikes, attributing them to greed and cartel-like behavior within the industry.

Calls for government intervention to regulate prices and ensure affordability resonate amid the growing hardship faced by Nigerians nationwide.

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Port Harcourt Refinery Receives Over 450,000 Barrels of Oil – Mele Kyari

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The Nigerian National Petroleum Corporation Limited (NNPC) has announced a significant milestone in the rehabilitation of the Port Harcourt refinery, with over 450,000 barrels of oil already stocked into the facility.

Mele Kyari, the Group Managing Director of NNPC, disclosed this development during a press briefing after appearing before a Senate Ad-hoc Committee investigating the various Turn Around Maintenance projects of the country’s refineries.

Kyari’s revelation underscores the progress made in the rehabilitation efforts of the Port Harcourt refinery, which has been undergoing mechanical works alongside the Warri and Kaduna refineries.

The influx of crude oil into the Port Harcourt facility signals a crucial step towards its operational revival, following years of underperformance and neglect.

Addressing the Senate committee, Kyari reiterated NNPC’s commitment to fulfilling its promises regarding the refinery rehabilitation projects.

He emphasized the importance of regulatory compliance testing before commencing operations, assuring stakeholders that the Port Harcourt refinery is poised to restart operations within the next two weeks.

The news of the refinery receiving a substantial volume of oil injects optimism into the Nigerian energy sector, highlighting the potential for increased domestic refining capacity and reduced dependence on imported petroleum products.

It also aligns with the government’s broader agenda of revitalizing the country’s oil and gas industry to drive economic growth and self-sufficiency.

As the Port Harcourt refinery gears up for a potential restart, attention now turns to the forthcoming regulatory compliance tests and operational readiness assessments.

The successful revival of the refinery holds the promise of not only bolstering Nigeria’s energy security but also stimulating broader economic development and job creation initiatives.

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CBN Governor Transfers N100bn Worth of Fertilisers to Agriculture Ministry for Food Security Enhancement

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The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, handed over N100 billion worth of fertilisers to the Federal Ministry of Agriculture and Food Security.

The ceremonial handover took place at the ministry’s headquarters in Abuja, where the Minister of Agriculture and Food Security, Abubakar Kyari, received the substantial contribution.

During the handing over ceremony, Governor Cardoso emphasized the CBN’s commitment to maintaining price stability, identifying the cost of food as a critical component of inflation.

He noted that addressing food inflation is pivotal due to the significant portion of household expenditure allocated to food and non-alcoholic beverages in Nigeria.

Despite the implementation of various measures by the CBN to curb inflation, the inflationary pressures remain largely driven by escalating food prices.

Cardoso acknowledged the challenges posed by transient inflationary pressures but expressed optimism about substantial alleviation by the third quarter of 2024.

The collaboration between the CBN and the Ministry of Agriculture aims to mitigate the surge in food prices by enhancing food productivity and security.

In alignment with its strategic shift, the CBN veered away from direct quasi-fiscal interventions and transitioned towards leveraging conventional monetary policy tools to execute monetary policies.

As part of this strategy, the CBN announced the allocation of 2.15 million bags of fertiliser valued at over N100 billion to support the Ministry of Agriculture in its efforts to enhance food productivity and security.

Minister Kyari praised the CBN for providing fertilisers, emphasizing their significance as the majority cost value in agricultural production inputs.

He highlighted the challenges faced by the agriculture sector due to various factors, including the COVID-19 pandemic, flooding, climate change, and the naira redesign policy.

However, Kyari expressed optimism about mitigating these challenges and reiterated the importance of fertilisers in agricultural production.

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