By Adedapo Adesanya
In another positive news, Nigeria’s inflation further eased to 32.15 per cent in August 2024, relative to the 33.40 per cent that was quoted in July 2024 and this offers a window of opportunity for the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to halt interest rates hike when it meets next week.
According to data from the National Bureau of Statistics (NBS) on Monday, the August 2024 headline inflation rate showed a decrease of 1.25 per cent points when compared to the July 2024 headline inflation rate.
However, on a year-on-year basis, the headline inflation rate was 6.35 per cent points higher compared to the rate recorded in August 2023 at 25.80 per cent.
This shows that the headline inflation rate (year-on-year basis) increased in August 2024 when compared to the same month in the preceding year (August 2023).
Furthermore, on a month-on-month basis, the headline inflation rate in August 2024 was 2.22 per cent, which was 0.06 per cent lower than the rate recorded in August 2024 (2.28 per cent).
This means that in August 2024, the rate of increase in the average price level is lower than the rate of increase in the average price level in July 2024.
This development may offer ease for businesses who have been lamenting the effect of the 26.25 per cent interest rate increment on their operations.
Some analysts have countered that the CBN might keep tightening in order to bring the rate further down, as it is still high comparatively.
The Food inflation rate in August 2024 was 37.52 per cent on a year-on-year basis, which was 8.18 per cent points higher compared to the rate recorded in August 2023 (29.34 per cent).
The rise in Food inflation on a year-on-year basis was caused by increases in prices of the following items, Bread, Maize Grains, Guinea Corn, etc (Bread and Cereals Class), Yam, Irish Potatoes, Water Yam, Cassava Tuber, etc (Potatoes, Yam & Other Tubers Class), Palm Oil, Vegetable, etc (Oil & Fats Class) and Ovaltine, Milo, Lipton, etc (Coffee, Tea & Cocoa Class).
On a month-on-month basis, the Food inflation rate in August 2024 was 2.37% which shows a 0.10 per cent decrease compared to the rate recorded in July 2024 (2.47%). The fall can be attributed to the decline in the rate of increase in the average prices of Tobacco, Tea, Cocoa, Coffee, Groundnut Oil, Milk, Yam, Irish Potatoes, Water Yam, Cassava Tuber, Palm Oil, and Vegetable.
The August 2024 Urban inflation rate was 34.58 per cent on a year-on-year basis, this was 6.89 per cent points
higher compared to the 27.69 per cent recorded in August 2023. On a month-on-month basis, the Urban inflation rate was 2.39 per cent in August 2024, this was 0.07 per cent points lower compared to July 2024 (2.46 per cent).
On the flip side, The rural inflation rate in August 2024 was 29.95 per cent on a year-on-year basis; this was 5.85 per cent higher compared to the 24.10 per cent recorded in August 2023. On a month-on-month basis, the rural inflation rate in August 2024 was 2.06 per cent, down by 0.04 per cent points compared to July 2024 (2.10 per cent).