Despite the opening of the country’s borders, the composite food index rose by 20.57 per cent in January 2021 from 19.56 per cent in December 2020.
This accounted for the bulk of the country’s inflation rate which rose from 15.75 per cent in December 2020 to 16.47 per cent in January 2021.
This figure is the highest since April 2017, according to figures disclosed by the National Bureau of Statistics in its Consumer Price Inflation report for January which was released on Tuesday.
Experts have blamed this on rising insecurity in the country which had endangered the lives of farmers and leading to food scarcity.
The Director-General, Lagos Chamber of Commerce and Industry, Dr Muda Yusuf, said the jump in inflation rate did not come as a surprise because all the factors that had been responsible for inflation were still very much at play.
He said, “We have factors like exchange rate depreciation which is affecting the price of imports and raw materials, foreign exchange liquidity problem which is affecting production in many manufacturing outfits and also affecting importation of finished goods.
“We have high cost of transportation which is still an issue because diesel has been going up gradually. We have the problem of insecurity which is affecting our agricultural output as you can see, food inflation was over 20 per cent. So you can see that the bulk of the forces around inflation are coming from food inflation. So the security problem is adding to the problem.”
He added, “The CBN financing of deficit has also been growing and this is highly inflationary and that is also a major factor of inflation that you have seen.
“If you want to address the issues of inflation, you need to address the causes to have a moderation or reduction in the general price level.”
Professor of Capital Market, Nasarawa State University, Prof. Uche Uwaleke, said, inflationary pressure came more from the food component.
“This reflects the lingering effects of increases in VAT, pump price of fuel and electricity tariffs as well as insecurity and transport bottlenecks,” he said.
According to the NBS, increases were recorded in all the Classification of Individual Consumption According to Purpose divisions that yielded the headline index.
The percentage change in the average composite CPI for the 12 months’ period ending January 2021 over the average of the CPI for the previous 12 months’ period was 13.62 per cent, representing a 0.37 percentage point increase over 13.25 per cent recorded in December 2020.
On month-on-month basis, the headline index increased by 1.49 per cent in January 2021.
The urban inflation rate increased by 17.03 per cent (year-on-year) in January 2021 from 16.33 per cent recorded in December 2020, while the rural inflation rate increased by 15.92 per cent in January 2021 from 15.20 per cent in December 2020.