Inflation rises to 14.89 per cent

[Edoman]

Inflation rises to 14.89 per cent
• LCCI blames it on forex, others
December 16, 2020


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The National Bureau of Statistics (NBS) on Tuesday said inflation rose by 14.89 per cent in November.

In October, it stood at 14.23 per cent, an indication that it rose by 0.66 per cent in the period under review.

It made this known in its Consumer Price Index (CPI) November.

The corresponding 12-month year-on-year, NBS said, average percentage change for the urban index was 13.65 per cent  in the period under review.

According to the NBS, this is higher than 13.29 per cent reported in October 2020, while the corresponding rural inflation rate in November 2020 is 12.35 per cent compared to 12.09 per cent recorded in October 2020.

NBS said: “The consumer price index, (CPI) which measures inflation increased by 14.89 percent (year-on-year) in November 2020. This is 0.66 percentage points higher than the rate recorded in October 2020 (14.23 per cent).”

The document said percentage change in the average composite CPI for the twelve months period ending November 2020 over the average of the CPI for the previous 12 months period was 12.92 percent, representing a 0.26 percentage point increase over 12.66 per cent recorded in October 2020.

It added that monthly, the urban index rose by 1.65 percent in November 2020, up by 0.05, from 1.60 per cent recorded in October 2020, while the rural index also rose by 1.56 per cent in November 2020, up by 0.08 from 1.48 per cent recorded in October 2020.

Continuing, the report said the urban inflation rate increased by 15.47 per cent (year-on-year) in November 2020 from 14.81 per cent recorded in October 2020, while the rural inflation rate increased by 14.33 percent in November 2020 from 13.68 per cent in October.

It said monthly, the Headline index increased by 1.60 percent in November 2020.

This is, according to the document, 0.06 percentage points higher than the rate recorded in October 2020 (1.54 percent). Increases were recorded in all COICOP divisions that yielded the Headline index, said the NBS.

The Lagos Chamber of Commerce and Industry (LCCI) said the inflationary pressure was expected, given the prevailing economic conditions and escalating cost environment.

Its Director-General, Dr Muda Yusuf, who spoke in Lagos, said the development was an indication that the key drivers of inflation had not abated.

He listed them to include sharp exchange rate depreciation, high transportation cost and the perennial bottlenecks at the Lagos ports.

Yusuf said the security challenges impeding agricultural output and demand pressures resulting from the festive season were also contributory factors.

He, however, expressed surprise at the slight decline in core inflation in spite of the skyrocketing prices of imported products.

“High inflation typically weakens purchasing power and aggravates the poverty incidence in the country.

“Mounting inflationary pressures also impacts on production, operating costs across sectors and erodes profit margins of businesses.

“There is no quick fix to the inflation challenge. We need to address structural constraints to output and productivity, fix the problem of logistics in all its dimensions, tackle the worsening security situation and reform the foreign exchange market to reduce volatility and uncertainty. These are the key solution options to  deal with the menacing problem of inflation,” he said