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Higher food prices push inflation slightly to 7.9% in April

By on May 16, 2014

Nigeria’s year-on-year Consumer Price Index (CPI) which measures inflation rose slightly to 7.9 per cent in April compared to 7.8 per cent the previous month, according to figures from the National Bureau of Statistics (NBS).
The uptick in the headline index was attributed to “higher food prices as well as divisions which contribute to the Core sub-index.”

According to the latest CPI figures which was released yesterday, food prices however, continued to be relatively stable year on year, moving in a 0.2 percentage point band between 9.2 per cent and 9.4 per cent over the last eight months.

The NBS said: “In April, specifically, food prices rose slightly by 9.4 per cent year on year, as a result of higher prices in the bread and cereals, meat, fish, dairy, oils and fats, and fruits classes. Prices in the food sub-index were however weighed down by relatively slower increases in the vegetables, potatoes, and yams and other tubers; and sugar, jam, honey, chocolate and confectionery classes. The relatively slower growth in the afore-mentioned classes has been observed over the last there months.”

It added: “After moving at a slower pace in March, prices measured by the core sub-index increased at a faster rate in April. Prices rose by 7.5 per cent year-on-year, 0.7 percentage points higher than the year-on-year rate recorded in March (6.8 per cent). This was as a result of higher increases in classes belonging to the housing, water, electricity, gas and other fuel; alcoholic beverages, tobacco and kola; and restaurants and hotels divisions amongst others.”

urban inflation also increased at the same rate in April relative to March as prices increased by 7.9 per cent (year-on- year).

On the other hand, the pace of increase in rural prices continued to weaken as prices increased at a slower rate for the fourth month consecutively.
In April, prices rose by 7.5 per cent year-on-year, marginally lower than price increase recorded in March by 0.1 percentage points.

On a monthly basis, price increases subsided in both urban and rural areas, the NBS added.

The report further noted that after a slight decline in March (year- on-year), the “All items less Farm Produce” or Core index, which excludes the prices of volatile agricultural products increased at faster rate in April.

“Prices increased by 7.5 per cent, an increase of 0.7 percentage points from 6.8 per cent recorded in March. This is also the highest year-on-year increase observed in the core sub-index this year. On a month-on-month basis, prices firmed in April, growing at the same rate observed in March: 0.4 per cent,” according to the statistical agency.

Meanwhile, it also emerged that Nigeria’s capital importation vault for the first quarter of 2014 stood at about $3.90 billion, representing only about 59.2 percent of the value recorded for the first quarter of 2013.
However, the NBS in its latest capital importation report which was released yesterday said the decline resulted from “the value of capital importation from shares, which is 47.1 per cent of what it was in quarter one of 2013.”

The telecommunications sector accounted for $135.7 million in capital importation in Q1 2014, it noted.

It added”Other areas of decline are the Financing sect or, which was lower by 37.6 per cent, banking at 26.5 per cent lower and Brewery, which had no capital imported in 2014 to date. Some sectors have seen increases. Oil and gas is most notable, with a quarter one 2014 value already 55.1 per cent greater than the value for the whole of 2013.

“Other areas of strong growth are the Telecommunications sector and Trading Sector. The $135.7 million recorded in quarter one of 2014 for the Telecommunications sector is 577.6 per cent greater than its corresponding 2013 value, whereas foreign capital for Trade increased eight fold, $151.1 million more than it’s quarter one 2013 value.

The NBS added that capital importation in the first quarter of 2014 had been lower compared to the receipts for 2013.

Specifically, the NBS said the “financial crisis largely shaped capital importation over the 2007- 2013 period. From $11,171.2 in 2008, it dipped to a low of $5,702.9 million in 2009.

“Yet Nigeria’s rapid recovery attracted higher levels of investment, allowing capital importation to soar to $21,318.4 million in 2013, a record high t o date. The main driver of this growth has been the Shares business, which saw a six-fold increase in capital value between the 2007 and 2013. This has been countered by a decline in the Banking business sector, which in converse declined to just 1/5th of its 2007 size.

“In spite of these developments, lower levels of capital importation for both the Stock business and Banking businesses have been observed in the first quarter of 2014, with total importation 40.8% lower than quarter one of 2013.”

It further stated that the greatest declines came from the banking and shares sectors with annual totals about $2.04 billion and $1.81 billion representing a 43.7 per cent and 53.0 per cent decline respectively from the preceding year.

“The Financing and Oil and Gas sectors also took a large hit, declining by 69.2% and 82.2% respectively, translating to a decline of over $500 million in each activity from 2008,” it added.

It said:”Prior to the global financial crisis, Nigerian capital importation was high and rising; it grew 16.7% from $9,573.2 million recorded in 2007 to reach $11,171.2 in 2008 (See Fig 1.0). The onset of the crisis brought a sharp decline in capital imported to half its value, at $5,702.9 million in 2009.”

 

 

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