Three Nigerian states of Kogi, Lagos and Bayelsa recorded the highest food inflation rates in July 2023, emerging as the places where food items were the most expensive in Nigeria, the National Bureau of Statistics (NBS) said in its latest inflation briefing.
According to the NBS, Nigeria’s food inflation rose for the seventh straight month to reach 26.98 percent in July, gaining 1.73 percentage points more than the 25.25 percent it recorded in June 2023, and increased more than the 22.02 percent it recorded in July 2022 by an additional 4.97 percent.
This is as the headline inflation continued its upward movement, setting a new high of 24.08 percent in July 2023, which was higher than the June 2023 rate of 22.79 percent, while on a year-on-year basis, it was also higher than the 19.64 percent recorded in July 2022.
“In July 2023, the headline inflation rate rose to 24.08% relative to June 2023 headline inflation rate which was 22.79%. Looking at the movement, the July 2023 headline inflation rate showed an increase of 1.29% points when compared to June 2023 headline inflation rate.
“On a year-on-year basis, the headline inflation rate was 4.44% points higher compared to the rate recorded in July 2022, which was 19.64%. This shows that the headline inflation rate (year -on-year basis) increased in July 2023 when compared to the same month in the preceding year,” the NBS stated.
In July 2023, twenty states had their food inflation rates higher than the national average of 26.98 percent with Kogi, Lagos and Bayelsa the worst hit while Jigawa, Sokoto, and Kebbi, all the in North-West geopolitical zone, had the least inflation rates in the country.
With a food inflation rate of 34.53 percent in July, Kogi State, North-Central Nigeria, topped the 36 states of the federation and FCT Abuja in July as having the highest food inflation rate in the country, implying that an item which ordinarily should have cost N2,698 on the average across Nigeria was sold for N3,453 on the average in Kogi State.
Lagos State, Nigeria’s commercial centre, came second, with a food inflation rate of 32.53 percent, while Bayelsa State had a food inflation rate of 31.31 percent.
Other states where food items were most expensive in July include Kwara, 30.87 percent; Imo, 30.28 percent; Ekiti, 30.19 percent; Ondo, 30.14 percent; Ogun, 30.12 percent; Edo, 29.89 percent, and Akwa Ibom, 29.61 percent.
The least food inflation rates in July were recorded in Borno at 23.16 percent; Taraba, 22.99 percent; Kebbi, 22.45 percent; Sokoto, 21,63 percent, and Jigawa, 20.90 percent.
Before the latest announcement, many analysts expected higher headline and food inflation rates following the recent economic reforms in the country, especially the removal of fuel subsidy and FX unification.
The fuel subsidy removal occasioned a steady rise in the price of Premium Motor Spirit, otherwise known as petrol, where a litre currently sells for about N617, and coupled with an increasing price of diesel per litre which is almost N900, transport costs surged across the country, affecting the landing costs of most agricultural produce and logistics.
According to NBS, in June 2023, interstate transport fare rose by 71.02 percent in South-East, 63.16 percent in South-South, 55.17 percent in North-West, 51.79 percent in North-East, 51.64 percent in South-West, and 44.57 percent in North-Central.
“Food prices are typically affected by seasonality, increasing during the planting season and reducing during harvest due to increased supply. However, the surge in logistics costs, naira depreciation, and the customs duty exchange rate adjustment could keep commodity prices elevated despite the commencement of the harvest season,” Financial Derivatives Company (FDC) said early August.
“Also, the closing of some of the land borders and India’s ban on rice exports would reduce supply and further stoke pricing pressures,” FDC said.
