Nigeria’s headline inflation rate accelerated for the seventh consecutive month to 24.08 percent in July 2023 from 21.82 percent in January, according to the latest inflation figures released by the National Bureau of Statistics (NBS). The rate is the highest since September 2005. It increased by 1.29 percentage points when compared to the previous month, 22.79, and on a year-on-year basis, it went up by 4.44 percentage points compared to 19.64 recorded in July 2022. The significant rise in inflation largely reflects fuel subsidy removal and exchange rate devaluation.
Food inflation increased by 1.73 percentage points to 26.98 percent from 25.25 percent the previous month. Core inflation also increased by 0.41 percentage points to 20.47 percent when compared to 20.06 in the previous month and increased by 4.41 percentage points when compared to the corresponding month in 2022. Furthermore, the data revealed that the highest increases were recorded in the prices of food and non-alcoholic beverages, housing, water, electricity, gas, and other fuel, clothing & footwear, and transport (including prices of passenger transport by air, passenger transport by road, vehicle spare parts, etc.)
The Chamber is concerned that there may be more inflationary pressures in the coming months due to the volatility of the Naira as well as the lagged effects of subsidy removal and its transmission to general prices.
LCCI recommends that the government should step up efforts to tackle food costs, especially staple food items. We commend the Federal Government’s declaration of a state of emergency on food security and urge them to prioritize farmers’ areas of assistance, fertilizers, and seeds to mitigate the effects of subsidy removal as well as strengthen strategic food reserves to be used as price stabilization mechanisms. The Chamber implores the government to hasten the provision of the anticipated palliatives to lessen the impact of the rising trend in prices on economic agents.
DR CHINYERE ALMONA, FCA
LAGOS CHAMBER OF COMMERCE & INDUSTRY
16 AUGUST 2023