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Concerns mount as inflation rate jumps to 13.71 per cent

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There are fears that the Nigerians’ living conditions may not fare better in the coming months following the continued rise in inflation rate. The inflation rate rose to 13.71 per cent in September, which is 0.49 per cent higher than 13.22 per cent recorded in August 2020.

The latest inflation figure was released on Thursday by the National Bureau of Statistics in its Consumer Price Index report.

The rate has been on a steady rise this year. For instance, the inflation rate stood at 12.82 per cent in July, compared to 12.56 per cent in June 2020.

The September figure is noted as the highest level since March 2018 when it hit a record high of 13.34 per cent.

According to the NBS new report, “The consumer price index which measures inflation increased by 13.71 per cent (year-on-year) in September 2020. This is 0.49 per cent points higher than the rate recorded in August 2020 (13.22) per cent.”

Details of the report showed that increases were recorded in all COICOP divisions that yielded the headline index.

On a month-on-month basis, the headline index increased by 1.48 per cent in September 2020, which is 0.14 higher than the August 2020 (1.34) figure.

The percentage change in the average composite CPI for the 12-month period, ending September 2020 over the average of the CPI for the previous 12-month period is 12.44 per cent, showing 0.21 percentage point from 12.23 in August 2020.

The urban inflation rate increased by 14.31 per cent (year-on-year) from 13.83 per cent recorded in August 2020, while the rural inflation rate increased by 13.14 per cent from 12.65 in August 2020.

The urban index rose by 1.56 per cent in September 2020, on a month-on-month basis. This was up by 0.14 from 1.42 per cent in August 2020.

The rural index also rose by 1.40 per cent in September 2020, up by 0.13 from 1.27 in August 2020.

The corresponding 12-month year-on-year average percentage change for the urban index is 13.07 per cent in September 2020.

This is higher than the 12.85 per cent in August 2020, while the corresponding rural inflation rate in September 2020 is 11.86 per cent compared to the 11.66 per cent of August 2020.

The Lagos Chamber of Commerce and Industry has expressed worry at the continued uptrend in headline inflation and urged the government to address issues around the disruption of agriculture value chain including insecurity problem.

Its President, Mrs Toki Mabogunje, said at a recent press briefing on the state of the economy that intense inflationary pressures would exert negative impact on households purchasing power, investment, production cost and business operations.

She noted the currency devaluation and the increase in value added tax rate as likely factors responsible for the higher inflation trend early this year, adding that the COVID-19 pandemic that paralysed the economy compounded the situation in the later months.

Mabogunje urged “the government to stem rising consumer prices through measures aimed at bridging supply gaps and reducing transportation costs. Similarly, there is a need to address the security concerns in the country, especially in the major food-producing areas.”

Business

Nigeria’s oil revenue not enough to cover petrol import costs – Finance minister

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Nigeria’s revenue being generated from its low oil production cannot cover the cost of imported petrol, Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.

She stated this on Thursday in an interview with Reuters on the sideline of the World Economic Forum (WEF) in Davos.

She said the Federal Government hopes that oil production will average 1.6 million barrels per day (bpd) this year.

In the first quarter of 2022, Nigeria’s oil production averaged 1.5 million bpd.

The minister said, “We are not seeing the revenues that we had planned for. When the production is low it means we’re … barely able to cover the volumes that are required for the (petrol) that we need to import.”

This year, the FG had budgeted 1.8 million bpd of production, but frequent crude theft and attacks on pipelines continue to affect the nation’s wealth.

In April, it asked the national assembly to drop the projected production volume to 1.60 million barrels per day.

Despite higher oil prices due to the Russia-Ukraine war, under-recovery costs, also known as petrol subsidy, continue to erode gains.

Nigeria has spent about N1 trillion on petrol import shortfall in the last four months and will spend up to N4 trillion this year. This has also dwindled the federation revenue — just as the Nigerian National Petroleum Company (NNPC) Limited has been unable to remit any amount to the government purse this year.

On the recent hike of the monetary policy rate by the Central Bank of Nigeria (CBN), the minister said the move was necessary due to policy adjustments by the US Federal Reserve and central banks in Europe.

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Aviation

No plane crashed in Lagos – FAAN, NEMA

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Two government agencies, the Federal Airports Authority of Nigeria and National Emergency Management Agency, have dismissed reports of a fresh plane crash in the Ikeja area of Lagos.

An internet user who saw a plane being towed away had sent the picture to the social media, concluding that it was the wreckage of a fresh plane crash in Lagos.

The aircraft, which had missing wings, was spotted on Ikeja-Agege road, causing gridlock along the route on Tuesday as the news went viral on the social media.

But FAAN in a terse statement posted on its social media handles, said Nigerians should disregard the news.

It stated, “The Federal Airports Authority of Nigeria would like to inform the general public to disregard the news making the rounds on social media about an alleged crash at Ikeja Airport.

“The aircraft was sold by the owner to a buyer, who was taking it to its final destination.”

Also, Ibrahim Farinloye, the zonal coordinator, South-West, NEMA, said after due consultations with all critical stakeholders and tracking of all incoming and outgoing flights in Lagos, there was no plane.

An aviation analyst, Daniel Dikio, had also tweeted his observation of the viral video.

“It is an Airbus A319, hasn’t flown domestically in years. I can see traces of a green logo; it likely belonged to First Nation Airways in its time.

“The wings are separated cleanly; this wouldn’t happen in a crash. The separation is a sign of dismantling.

“There is no damage to the fuselage, almost impossible given the purported circumstances”, Dikio noted.

 

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Business

FG targets 1.4mbpd domestic refining before 2027

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Minister of State for Petroleum Resources, Chief Timipre Sylva

The Federal Government has disclosed plans to actualise 1.4 million barrels per day, mbpd, domestic refining of crude oil in the next five years.

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