Photograph — Money

The latest inflation report from the National Bureau of Statistics (NBS) shows that the year-on-year inflation rate in Nigeria rose to 11.98 percent by December 2019, against 11.44%  recorded as at the end of 2018, an increase of 0.54 percent. 

The core inflation was propelled by a surge in prices of services ranging from hospital, hairdressing, air transport, and personal grooming, as well as in the cost of commodities such as garments, vehicle spare parts, footwear, appliances, clothing, and related accessories.

According to the data released by the NBS, the food price index shows inflation at 14.67 percent in December 2019 compared with 14.48 percent recorded in November 2019. “On a month-on-month basis, the Headline index increased by 0.85 percent in December 2019, this is 0.17 percent rate lower than the rate recorded in November 2019 (1.02) percent,” part of the report reads.

The rice in the food index was caused by increases in the prices of bread and cereals, meat, fish, potatoes, yams, and other tubers. The index for core inflation (All items less farm produce), which excludes the prices of volatile agricultural produce also rose 9.33 percent in December 2019, up by 0.34 percent when compared with 8.99 percent recorded in November 2019.

A rise in inflation means that the consumer purchasing power of Nigerians has reduced and, as a result, several individuals and businesses will bear additional costs. 

Many companies operating in Nigeria, particularly in the Fast Moving Consumer Goods (FMCG) sector, are suffering from the prolonged closure of the country’s borders. This is due to the extra costs incurred in exporting their goods and importing some condiments used in making their goods from neighbouring African countries through the seaports. 

Investigation revealed that before the closure of the borders in August 2019, these companies distributed their goods by road through trucks and brought in the condiments through the same process. That they are forced to use seaports now is a major contributor to the rising inflation, according to consumer goods producers.

The Director-General, Lagos Chamber of Commerce and Industry, Dr Muda Yusuf, while addressing the issue, highlighted the consequences of the closure to include the complete shutdown of cross border trade (imports and exports) between Nigeria businesses and other countries in West Africa.

Muda observed the grave consequences on investments and jobs, adding that the majority of the victims were small businesses, most of them in the informal sector.

By Ahmed Iyanda.

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