By David Akinmola
Nigeria continues to buck the global trend of rising prices, with consumer prices ticking lower for the seventh month running, government figures showed on Monday.
Nigeria’s inflation rate fell to 15.99 per cent in October compared with the same period last year, and was 0.64 per cent lower than September’s annualised reading, the country’s National Statistics office said.
The drop in the headline rate was driven by easing yearly food inflation, with prices falling from 19.5 per cent in September to 18.3 per cent in October.
“Domestic factors appear to be behind the drop in food price pressures; imported food inflation remained stable,” noted Capital Economics Virag Forizs in a client note on Monday.
The downward trend, said analysts, is likely to give the country’s monetary policymakers sufficient space to hold interest rates steady when they meet next week, rather than be compelled to increase them to cool rising prices – a move that could also weigh on economic growth in Africa’s largest economy.
Inflation has exceeded the central bank’s targeted rate of 6 per cent nine per cent for years. Forizs said that while it is like to keep edging lower over the coming months, inflation is unlikely to fall within the central bank’s target range “any time soon.”
She added that ‘increasingly distortionary” foreign exchange rules will continue to weigh on the country’s currency, the naira, which will “keep imported goods inflation high.”
MEANWHILE, Every morning, Esther George rises before dawn to prepare a cooler of rice and a large pot of beans, as well as yams and an assortment of other staple foods to reheat and sell to customers from a roadside table in Lagos.
Before the coronavirus pandemic, the mother of three would clear a monthly profit ranging from roughly 10,000 ($24.40) to 15,000 naira ($36.60), she said. But this year, she’s fallen deeper and deeper into the red, racking up monthly deficits between 30,000 ($73) and 40,000 naira ($97.40).
“Before [the pandemic], we used to buy one derica [a local measurement named after a brand of tomatoes ] of beans for 300 naira ($0.73). Now we are buying it for 600 ($1.50). The price of two is now the price of one,” said George.
“What you are buying for 500 naira ($1.20) before, tomorrow it will be 550 ($1.34), the day after that it will be 600 naira and so on,” she told this medium.
Nigeria’s yearly inflation rate hit 16.3 per cent in September .
Nigeria’s yearly inflation rate hit 16.3 percent in September. Though that is lower than this year’s 18 per cent peak in March, higher prices for food, fuel and other raw materials are squeezing small business owners, forcing them to either cut back on production, fall into debt, or pass on cost increases to customers who are also feeling squeezed.
George has tried to slash expenses by producing less and dropping some items from her menu – like eggs. She used to sell ten dericas of beans on average a day, but has cut back to five. And even if she could afford ten, she can’t absorb the cost of the three butane-propane gas cylinders needed to reheat that volume of food – because prices for the fuel cylinders have increased threefold.