The Consumer Price Index (CPI) data released by the National Bureau of Statistics (NBS) revealed that inflation rate (year-on-year) continued to increase, rising to 26.72% in September from 25.80% in August, implying 0.92% points increase, and 5.94% points when compared to 20.77 recorded in the corresponding month in 2022. On a monthly basis, consumer prices rose by 2.1% in September, following a 3.2% surge in the prior month. This was largely driven by increase in food and core inflation.
Food inflation rate increased to 30.64% in the month, implying 1.30% points increase from 29.37% in the previous month and 7.30% points increase compared to 23.34% points in the corresponding month in 2022. Similarly, core inflation increased to 21.84%, 0.69% point and 4.35% points increase when compared to 21.15% and 17.49% in August 2023 and September 2022 respectively. In terms of contributions of items, the data revealed that food and non-alcoholic beverages contributed the highest to the price increase at 13.84% followed by housing water, electricity, gas and other fuel (4.47%), clothing and footwear (2.04%), transport (1.74%) and furnishings & household equipment & maintenance (1.34%).
Following nine consecutive months of acceleration, the outlook for inflation appears negative. The Chamber is concerned about the continued uptick in inflation (year-on-year), and, its impact on consumers’ spending and manufacturing productivity in the country. As a result, we anticipate economic policymakers to give priority to inflation as well as businesses in the short term to implement a variety of cost reduction strategies, including downsizing and local sourcing of input factors as they bid to lower operating expenses. Also, households must consider the costs/ prices of items when catering to their immediate needs.
LCCI recommends that the government focus its efforts on boosting supply rather than a decline in demand. We implore the government to address the challenges inhibiting domestic production and ease the bottlenecks to the distribution of goods within the country. Further, we urge the government to continue to address the problems of insecurity and other factors affecting agriculture productivity in the country to improve food supply. Finally, LCCI urges the CBN to improve the flow of credit to the real economy.
DR CHINYERE ALMONA, FCA
LAGOS CHAMBER OF COMMERCE & INDUSTRY
16 OCTOBER 2023