With the unprecedented rise in the cost of staple foods and consumables completely priced out of the reach of majority of Nigerians, obtaining a three square meal these days, is now a luxury many cannot afford. In this report, Charles Okonji examines the causes and effects
One of the sore points of the ravaging coronavirus scourge is the fact that it has adversely affected the cost of staple foods and other consumables in terms of prices.
Before the lockdown in mid-January to February, the prices of fast moving consumer goods (FMCG) and produce, especially, were relatively cheap and affordable.
However, since the spread of the pandemic which led to partial lockdown by the government, prices of foods generally has literally gone high leaving the consumers already suffering from the bitter pill of a parlous state of the economy, in total quandary and helplessness of sort.
During the Q3 of 2019, Nigeria’s economy experienced acute shortage of food, leading some analysts into forecasting that the country would run into serious food crisis in the Q1 of 2020, which became a reality with the lockdown effect that emanated from Covi-19 pandemic.
Data from the National Bureau of Statistics (NBS) reveal that Nigeria’s inflation rate increased by 12.34% (year-on-year) in April 2020. This is 0.08% higher than the rate of 12.26% recorded in March 2020 and the highest rise since April 2018.
According to the latest CPI report released by the NBS, inflation rate increased by 12.34% (year-on-year) in April 2020 from 12.26% recorded in March 2020.
On a month-on-month basis, the index increased by 1.02% in April 2020, a 0.18% rate higher than 0.84% recorded in the previous month.
The report further disclosed that food index rose from 14.85 percent recorded in January to 14.9 percent in February 2020 while core inflation increased by 0.08 percent to stand at 9.43 percent compared to 9.35 percent recorded in the preceding month.
Upward movement in price was recorded in all subsets of the consumer price indexes, and urban and rural inflation rate increased year-on-year by 12.85 percent and 11.61 percent in February from 12.78 percent and 11.54 percent recorded in January respectively.
The composite food index increased by 15.03% in April 2020 0.03 points higher, compared to 14.98% recorded in March 2020
On a month-on-month basis, the closely watched component of the inflation index increased by 1.18% in April 2020, up by 0.24% points compared to 0.94% recorded in March 2020. According to the report, the rise in the food index was caused by increases in prices of potatoes, yam and other tubers, fish, oils and fats, meat, fruits, bread and cereals, and vegetables.
It is worthy of note that core inflation, which excludes the prices of volatile agricultural produce climbed by 9.43 percent in February 2020, depicting a figure of 0.08 percent higher when compared to 9.35 percent recorded in the previous month.
The foremost increase were recorded in prices of pharmaceutical products, catering services, air transport, furniture repairs, repairs and maintenance of personal transport equipment, water supply and water consumption, major household equipment and appliances, dental care and services, carpet tiles and other floor coverings, vehicle spare parts and vehicle maintenance, durable and non-durable household goods.
Core inflation (All items less farm produce) which excludes the prices of volatile agricultural produce stood at 9.98% in April 2020, a 0.25% increase when compared to 9.73% recorded in March 2020.
On a month-on-month basis, the core sub-index increased by 0.93% in April 2020, up by 0.13% when compared with 0.8% recorded in the previous month.
The highest increases according to the report, were recorded in prices of bicycle, passenger transport by road, passenger transport by sea and inland waterways, paramedical services, hospital services, pharmaceutical products, medical services, motorcycles, and major household appliances whether electronic or not.
Bauchi state recorded the highest year-on-year inflation rate of 14.44% followed by Rivers state with 14.16% and Sokoto state, which recorded a 13.99% inflation rate. Meanwhile the states with the lowest rise in inflation rate were Kwara (8.98%), Abuja (10.8%), and Edo state with 10.87%.
Sokoto state also recorded the highest year-on-year food inflation rate, followed by Abuja with 17.65% and Akwa Ibom, which recorded 17.55%. On the other hand, Enugu state recorded the slowest rise in food inflation, having recorded a 12.89% increase, followed by Edo state with 12.9% and Ebonyi state with 13.04%.
The latest inflation report implies a fast rise in the prices of overall goods and services in the economy, caused by the lockdown procedure in response to Covid-19 pandemic and the continual global oil crisis. It should be noted that the latest increase in the inflation rate means that the purchasing power of consumers to buy goods and services deteriorated.