The already alarming headline inflation rate in Nigeria has increased to 22.79%.
The development has caused the suffering of the general public to worsen even further.
Despite the Central Bank of Nigeria’s efforts to halt the trend, the country’s inflation rate jumped six times in a row in June, according to the National Bureau of Statistics’ Consumer Price Index, or CPI.
With the MPR now at 18.5%, the CBN has continued to raise it in an effort to lower inflation, but it doesn’t appear to have had any impact on the nation’s rising inflation.
The CPI puts the average change in costs of products and services that people use on a daily basis into perspective.
The most current inflation rate shows an increase of 0.38 percent over the previous month’s rate, which was 22.41 percent.
Compared to the headline inflation rate of 22.04 percent in March 2023, the inflation rate in April was 22.22 percent. In addition, February’s headline inflation rate was 21.91 percent compared to January’s figure of 21.82 percent.
According to a state-by-state analysis, Lagos State had the highest headline inflation rate, at 25.75%.
Ondo (25.40%) and Kogi (25.23%) saw the slowest increase in headline inflation on a year-over-year basis, followed by Borno (20.44%), Zamfara (20.93%), and Ekiti (21.06%).
However, on a month-over-month basis, Ogun (3.21%), Plateau (3.05%), and Jigawa (3.00%) experienced the biggest gains in June 2023, while Zamfara (1.40%), Delta (1.42%), and Rivers (1.54%) experienced the lowest increases.
Undoubtedly, the withdrawal of gasoline subsidies and the unification of the foreign exchange market, which were implemented by President Bola Ahmed Tinubu’s administration in June, have worsened the bad trend of growing inflation.
As a result, the removal of gasoline subsidies had an immediate effect on the costs of transportation, commodities, and services.
According to NBS, the increase in prices for fish, potatoes, yams, and other tubers, as well as fruits, meat, vegetables, milk, cheese, and eggs, resulted in a food inflation rate of 25.25 percent in June.
In the meantime, a DAILY POST market analysis revealed that prices of goods and services have jumped by 20% to 50%.
For instance, a ‘Mudu’ of garri, which cost N700 before fuel subsidies were removed, is now N900; a mudu of rice went from N1,000 to N1,200; beans (white beans) increased from N700 to N850 per mudu; one litre of groundnut oil went from N900 to N1,200; a sachet of tomatoes went from N100 to N150; and a crate of eggs is now N2,300 instead of N1,900.
Prices across the value chain increased for transportation, housing, health care, education, communications, apparel and footwear, as well as other goods and services.
Mixed emotions have followed the development, notwithstanding the fact that the federal government had proposed N500 billion in palliatives, where 12 million households would receive N8,000.
Others said that it would have an impact as long as the proper individuals benefited from it, while some felt the palliative would not be sufficient to mitigate the effects of the loss of fuel subsidies.
On Monday, Dr. Ayo Teriba, the Chief Executive of the Economic Associates, informed the Daily Post that the withdrawal of gasoline subsidies will have three additional effects: an increase in price, a decrease in quantity, and a decrease in real income effects.
“Removing fuel subsidies and unifying the currency may not have an immediate effect.
Three to four months may pass. Impact of unification of exchange rates is negligible, however petrol pump prices are very high.
“For instance, a car owner who filled up his vehicle prior to the termination of the subsidy must now cut the amount purchased.
Rising inflation has repercussions on prices, quantities, and real income, according to him.
Idakolo Gbolade, Chief Executive Officer of SD & D Capital Management, added that the withdrawal of fuel subsidies and the forex unification policy are not unrelated to the skyrocketing inflation.
He claimed that the recent decline in the value of the Naira relative to the US dollar is also to blame for the growing inflation rate.
Gbolade suggested that in order to stop the Naira’s decline, the government should inject US dollars into the market.
The recent withdrawal of subsidies and the government’s foreign exchange strategy, which has put a lot of pressure on goods and services as well as people’s disposable income, are to blame for the latest inflation rates.
The recently announced food security emergency by the incoming administration must be swiftly implemented, along with other pro-active steps to stop the skyrocketing food costs. Staple price reductions would also be aided by the release of grains from the federal government’s strategic grain reserves.
He said, “The CBN should urgently release additional US dollars into the system to pressure down the ongoing rise of the US dollar rate to the Naira because it has a big contribution to the most recent inflation data.
The government should open its land borders right away, according to Mr. Kunle Olubiyo, President of Network of Energy Reforms Nigeria and Nigeria Consumer Protection Network, in order to drive down food prices.
Even if the opening of the land borders is only going to last for three months to a maximum of six months, the federal government may need to do so in order to permit the importation of some automobiles and food goods in order to reduce the price of food and other critical commodities.
Given the enormous demand, it is clear that there is a major shortage of vital food staples.
“Rapid supply shortages are currently occurring due to excessive demand.
In order to make up for revenue shortfalls, he said, “Government can introduce some consumption taxes and duties and reinvest those gains into the development of Agric Business & Commercial Agriculture Value Chain.”
Similarly, Nigeria is bleeding from the mess former President Muhammadu Buhari made of the nation’s economy, according to Prof. Godwin Oyedokun, a professor of accounting and financial development at Lead City University in Ibadan.
He stated that although there would be challenges in the short term, the country’s economy would eventually recover.
“The recent economic reforms are challenging for Nigerians in the near term, but in the long term, the effects of this government’s economic policies will be felt by Nigerians.
“The current trend in inflation is not the result of what happened yesterday, but rather a result of what has occurred over the years,” he said.
