The National Bureau of Statistics in its recent report on inflation in Nigeria, shows that inflation rate in Nigeria declined for the sixth consecutive month to 16.63 per cent in September, its lowest level since January this year.
According to the NBS, in its Consumer Price Index released on Friday, said the inflation rate fell by 0.38 per cent from 17.01 per cent in August,
The drop in headline inflation began in April when it fell to 18.12 per cent from 18.17 per cent in March.
The NBS said “The urban inflation rate increased by 17.19 per cent (year-on-year) in September 2021 from 17.59 per cent recorded in August 2021, while the rural inflation rate increased by 16.08 per cent in September 2021 from 16.45 per cent in August 2021.”
It said farm produce such as bread, cereals, cocoa, meat, coffee, tea and cocoa drove food inflation, which fell to 19.57 per cent in September from 20.30 percent in August.
Other items that led to the rise in the composite food index in September included oils and fats, yam and other tubers, fish, potatoes, milk, cheese and egg.
On month-on-month basis, the food sub-index increased by 1.26 per cent in September 2021, up by 0.20 per cent points from 1.06 per cent recorded in August 2021,” the NBS said.
The Statistician-General of the Federation, Simon Harry, said the fall in the inflation rate signalled an improvement in government performance and more favourable economic conditions.
He said, “The inflation rate in Nigeria has maintained a consecutive decline in year-on-year for a period of six consecutive months, starting from March 2021 to August 2021.
What the CBN predicted about inflation
The Central Bank of Nigeria in August predicted that the inflation rate would drop to a single digit in 2022.
This projection is according to the Director of Monetary Policy Department, CBN, Dr Hassan Mahmud, who disclosed this at a virtual mid-year economic review and outlook 2021, organised by the Chartered Institute of Bankers of Nigeria’s Centre for Financial Studies and B. Adedipe Associates.
The country’s inflation rate fell slightly from 17.93 per cent in May to 17.75 per cent in June, according to the National Bureau of Statistics.
Mahmud said since the economy recovered from recession in the last quarter of 2020, it had maintained a path of recovery despite certain challenges triggered by the COVID-19 pandemic and insecurity.
He said despite challenges such as insecurity, exchange rate market pressure, declining capital inflows, high debt service payments and rising fiscal deficits, the apex bank projected speedy domestic recovery.
According to him, if certain things were in place, the country would experience some positive projections in 2021 and the beginning of 2022.
Mahmud said, “Also, if the CBN forecasts for GDP growth are sustained and there is improved vaccination and the health hazards and lockdowns are not resurfacing, we will see GDP getting close to three per cent by the end of 2021.
We will also see the inflation number coming down less than 13 per cent by the end of the year and further down to the NBS projection of single digit by 2022 or the middle of 2022.
“We will start seeing a downward trend in inflation numbers, particularly, headline inflation.”
According to Mahmud, there will be a drop in food inflation, if an effective supply system is maintained and security issues mitigated.
The Chief Consultant of BAA Consult, Dr Biodun Adedipe, who also spoke at the event, said if the oil sector became positive in the areas of prices and production volume and export volume, this would add to economic growth.
He said, “At BAA, our projections for Nigeria economic growth for 2021 had remained 2.54 per cent since February and we have maintained it so.
“If the prognosis, the oil sector in Nigeria is positive in terms of price, production volume and export volume, that goes a long way in driving growth and changing some of what we see as headwinds and risks.”