Nigeria’s inflation rate hits 15.75% on increase in food prices

The increase in the prices of bread, cereals, yam and other food items is largely responsible for the latest rise in Nigeria’s inflation rate to 15.75 per cent.

The inflation rate for December 2020 rose by 0.86 when compared to the November figure of 14.89, according to a report released on Friday by the National Bureau of Statistics.

The report also shows the latest inflation rate is the highest since November 2017 when it was 15.90.

The NBS said the composite food index rose by 19.56 per cent in December from 18.30 per cent in November.

“This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam, and other tubers, meat, fruits, vegetable, fish and oils, and fats,” it stated.

Analysts at the Financial Derivatives Company Limited, led by foremost economist Bismarck Rewane, had said last week predicted that headline inflation would increase by 0.51 per cent to 15.4 per cent in December, describing it as “a hydra-headed monster that has eroded the disposable and discretionary income of consumers”.

“The continued rise in the general price level is driven largely by forex rationing, output and productivity constraints, higher logistics and distribution costs,” they said.

The analysts said consumer disposable income had been negatively affected by the hike in electricity tariffs, general reductions in subsidies, and improved tax mobilisation.