Chief Operating Officer (COO) of Financial Derivatives Company (FDC) Bismarck Rewane, warned that the fall in the inflation rate in January was no cause for celebration.
Rewane said this simply reflects seasonal favors like the harvest boom and post-Christmas blues, explaining that core inflation, which is a season without inflation, actually rose while other sub-indices rose. decreases.
“The data shows a marginal decline (0.03%) in headline inflation to 15.60%. This time around, the stats mostly reflect seasonal factors (harvest and post-Christmas blues). This is because core inflation, which is seasonality without inflation, actually rose while other sub-indices fell,” Rewane said.
He said, however, that since January there have been major developments, which indicate that inflation is likely to reach another inflection point in February. Some of these factors are seasonal while others are structural and fundamental to the Nigerian economy.
Fuel scarcity, particularly the sharp rise in the price of diesel to 410-420 naira per litre, the planting season and monetary pressures are all likely to propel another round of price increases.
Monthly inflation fell from 0.34% to 1.47% (19.24% annualized) from 1.82% in December (24.07
% annualized). This is partly due to the harvest and lower overall demand due to the post-Christmas blues.
In January, the annual and monthly food indices decreased. The annual food index fell 0.24% to 17.13%, while the monthly index fell 0.57% to 1.62%. This was largely due to the harvesting of major staples such as tomatoes, capsicum and onions. However, the prices of bread and cereals, potatoes, yams and other tubers, soft drinks, oils and fats and fruits have increased due to monetary pressures and the imposition of taxes on non-alcoholic and carbonated drinks.
The states with the lowest inflation rates are Kwara (12.94%), Niger (14.10%) and Oyo (14.19%). Inflation was highest in Northern Nigeria – Abuja (18.59%), Kogi (18.28%) and Bauchi (17.61%).