… it’s a hydra-headed monster that has eroded disposable and discretionary income of consumers
Nigeria’s inflation rate has spiralled to its highest level in more than three years, according to data released on Friday by the National Bureau of Statistics (NBS).
NBS said as at December 2020 inflation stood at 15.75 per cent against 14.89 per cent in November.
It said the consumer inflation rate of December 2020 was the highest since November 2017, when it stood at 15.90 per cent.
“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,” the bureau explained.
Last week, some economic analysts had predicted that headline inflation would increase by 0.51 per cent to 15.4 per cent in December, calling it a hydra-headed monster that has eroded the disposable and discretionary income of consumers.
According to them, the continued rise in the general price level is driven largely by forex rationing, output and productivity constraints, higher logistics and distribution costs.
Consumer disposable income, they noted, had been negatively affected by the hike in electricity tariffs, general reductions in subsidies, and improved tax mobilisation.
Cordros Capital Limited said: “We believe the sustained pressure in the food basket is reflective of the impact of the underwhelming harvest season, persistent security challenges in the food-producing regions, and festive induced demand which further widened the demand-supply imbalance.”