As Nigeria continues to deal with the economic implication of the COVID-19 pandemic, inflation rate rises to 12.40% (year-on-year) in May 2020, 0.06% points higher than 12.34% recorded in April 2020.
The latest inflation figure indicates the highest in over two years, since April 2020 when the CPI recorded was 12.48%. This is detailed in the latest inflation report released by the National Bureau of Statistics (NBS).
On month-on-month bases, the headline index increased by 1.17% in May 2020, a 0.15% point higher compared to 1.02% recorded in April 2020.
Food inflation, a closely watched component of the inflation index rose by 15.04% (year-on-year) compared to 15.03% recorded in the previous month. A rise which was caused by increases recorded in process of Bread and cereals, potatoes, yam, and other tubers, oils and fats, fruits, fish, and meat.
Also, on a month-on-month basis, the food sub-index increased by 1.42% in May 2020 from 1.18% recorded in April 2020, which indicates a 0.24% rise.
Core inflation, the “All items less farm produce” or Core inflation which excludes the prices of volatile agricultural produce stood at 10.12% in May 2020, up by 0.14% points when compared to 9.98% recorded in April 2020.
However, on a month-on-month basis, the core sub-index stood 0.88% in May 2020. This was down by 0.05% point when compared to 0.93% recorded in April 2020.
The highest increases were recorded in prices of pharmaceutical products, medical services, repair of furniture, hospital services, passenger transport by road, motor car, bicycles, maintenance and repair of personal transport equipment, passenger transport by sea and inland waterways, paramedical services, motorcycles and hairdressing salons, and personal grooming establishment.
Worst hit states
In May 2020, Rivers (14.69%) states recorded the highest all-items inflation on a year-on-year basis, followed by Bauchi states, which recorded 14.31% and Ebonyi state with 13.87%. Kogi and Plateau state also recorded an inflation rate of 13.87% in May 2020.
On the other hand, Kwara state recorded the lowest rate of 10.58%, followed by Adamawa (11.1%), Benue (11.13%), Kaduna (11.28%) and Enugu (11.4%).
With respect to food inflation, Abuja recorded the highest with 18.13% followed by Osun state with 17.4%. Closely followed are Rivers, Imo with 17.19%, and 17.13% food inflation rate respectively.
The latest inflation report implies a fast rise in the prices of overall goods and services in the economy, caused by the partial restriction in trading activities across the country.
It should be noted that the latest increase in the inflation rate means that the purchasing power of consumers to buy goods and services deteriorated in May 2020 compared to the previous month. That is, the ability of consumers to buy the same quantity of goods with a fixed income level has worsened within the period.
The trend is feared to continue into the month of June as Nigeria still continues to grapple with the effect of the Coronavirus pandemic, even as the country embarks on phase two easing of lockdown.