The National Bureau of Statistics, NBS, stated in its latest report released yesterday that food price pressure continued into July as all major food sub-indexes increased, with food inflation in the country rising by 20.28 per cent Year-on-Year (YoY) in July.
Reviewing the NBS report, Opeoluwa Idowu, an economist with Consumersng submits that this represents the highest year on year increase in food prices since 2009.
The report came on a day President Muhammadu Buhari charged the Finance Minister, Mrs. Kemi Adeosun, her Budget and Planning counterpart, Udoma Udo Udoma and Governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele, to rev up efforts to quickly steer the economy out of recession but expressed delight at the improvement the economy had made.
In the report, NBS noted that the food index in July was up by 0.37 per cent over 19.91 per cent recorded in June.
The report further stated that the rise in the food index was caused by increase in prices of bread and cereals, meat, fish, oils and fats, coffee, tea and cocoa, potatoes yam and other tubers and vegetables.
“On a month-on-month basis, the food sub-index increased by 1.52 per cent in July, down by 0.47 per cent points from 1.99 per cent recorded in June.
The average annual rate of change of the food sub-index for the 12-month period ending in July 2017, over the previous 12 month average was 18.25 per cent, 0.38 per cent points from the average annual rate of change recorded in June (17.87) per cent,” the report stated.
The last time food inflation was this high in the country, at 20.9 per cent in July 2008, was the peak of the 2007/2008 global food crisis brought on by harsh droughts in food-producing regions, higher energy costs, and increased speculation on food commodity prices, economic research by Vetiva noted.
Annual inflation drops by 0.05 per cent — NBS
Meanwhile, NBS also reported that annual inflation in Nigeria dropped by 0.05 per cent in July, easing to 16.05 per cent from 16.10 per cent recorded in June, making it the sixth consecutive decline in the rate of headline year on year (YoY) inflation since January.
The report stated: “On a month-on-month (MoM) basis, the headline index increased by 1.21 per cent in July from 1.58 per cent recorded in June. The urban index rose by 16.0 per cent YoY in the same month, down by 0.11 per cent point from 16.15 per cent recorded in June, while the Rural index increased by 16.08 per cent in July from 16.01 per cent in June.
“On MoM basis, the urban index rose by 1.25 per cent in July 2017, down by 0.35 per cent point from 1.60 per cent recorded in June, while the rural index rose by 1.18 per cent in July 2017, down by 0.39 per cent point from 1.57 percent in June.
‘’All Items less Farm Produce’’ or Core sub-index, which excludes the prices of volatile agricultural produce eased by 0.30 per cent during the month to 12.20 per cent points from 12.50 per cent recorded in June as all key divisions which contributes to the index increased.”
According to the report, the corresponding 12 month year-on-year average percentage change for the urban index increased from 18.69 per cent in June to 18.43 per cent in July, while the corresponding rural index also increased from 16.56 per cent in June to 16.60 per cent in July.
Reason for marginal decline in inflation rate —Expert
Reacting to the report, Mr. Johnson Chukwu, Managing Director/CEO, Cowry Asset Management Limited, said principally, decline in inflation has remained marginal due to the increase in food inflation.
“During the harvest season, it is expected that food prices will come down, but that has not happened; prices of food have remained high contrary to expectations, food inflation has remained recalcitrant and that is why you see only marginal decline (0.05 per cent) in food inflation,’’ he said.
He said though the federal government was making efforts to improve agriculture in the country, the impact of the agriculture programmes was yet to be felt.
He added that food inflation had also remained high due to weak transport infrastructure. According to him, the cost of transporting food items from rural to urban areas is still high.
Buhari tasks Economic team
Meanwhile, President Muhammadu Buhari, yesterday, expressed delight about the improving state of the economy but charged its managers to do more to get Nigerians out of recession as quickly as possible and bring them succour.
The President spoke as he met with the Minister of Finance, Mrs. Kemi Adeosun; her Budget and Planning counterpart, Udoma Udo Udoma, and Governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele, at the Presidential Villa, Abuja to take briefings on the performance of the economy.
President Buhari’s thoughts were contained in a statement signed by his Special Adviser, Media and Publicity, Mr. Femi Adesina.
Adesina said Buhari reminded the ministers and CBN governor that reviving the economy was one of the major planks which the campaign of the All Progressives Congress, APC, his party, was built on.
He said Buhari, while urging them “to keep at it” stated that the “main aim of government was to bring succour to Nigerians across all walks of life.”
The statement read: “For almost two hours, President Muhammadu Buhari, Monday (yesterday), received briefing from the Minister of Budget and National Planning, Senator Udoma Udo Udoma; the Minister of Finance, Mrs Kemi Adeosun, and Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, after which a delighted President declared that he was pleased with the progress being made on different fronts.
“The ministers and CBN governor updated the President on the improving state of the economy, implementation of the 2017 budget, preparation for the 2018 budget, revenue strategies, combined cost reduction and debt management. Also discussed were monetary policy strategies and their economic impact, among others.
“President Buhari, while reminding the ministers and CBN governor that reviving the economy was one of the major planks on which the campaign of his party, the All Progressives Congress, APC, was based, expressed gladness that things were looking up after two years of yeoman’s job.”