Nigeria's inflation rate has risen to 22.04 per cent in the month of March from 21.91 per cent in February 2023, the National Bureau of Statistics (NBS) said, yesterday, disclosing it is the third consecutive rise in inflation this year.

The inflation rate data report released NBS showed an increase of 0.13 per cent points when compared to February 2023 headline inflation rate.

According to the report: “On a year-on-year basis, the headline inflation rate was 6.13 per cent points higher compared to the rate recorded in March 2022 which was 15.92 per cent.

“This shows that the headline inflation rate (year-on-year basis) increased in March 2023 when compared to the same month in the preceding year (March 2022).

“However, on a month-on-month basis, the all-items index in March 2023 was 1.86 per cent, which was 0.15 per cent points higher than the rate recorded in February 2023 (1.71 per cent),” NBS said.

According to the report, in March 2023, on average, the general price level was 0.15 per cent higher relative to February 2023. NBS also said that items like food and non-alcoholic beverages contributed largely on the divisional level to the increase in the headline .

“The contributions of items on the divisional level to the increase in the headline index are food and non-alcoholic beverages (11.42 percent); housing, water, electricity, gas, and other fuel (3.69 percent),” the agency said.

“Clothing and footwear (1.69 per cent); transport (1.43 per cent); furnishings, household equipment and maintenance (1.11 per cent); education (0.87 per cent); restaurants and hotels (0.27 per cent); alcoholic beverages, tobacco and kola (0.24 per cent); recreation and culture (0.15 per cent) and communication (0.15 per cent).”

Meanwhile, the NBS said that food inflation in March 2023 to rose to 24.45 per cent on a year-on-year basis — representing a 7.25 per cent points higher compared to the rate recorded in March 2022.

The statistics body explained that the rise was caused by increases in prices of oil and fat, bread and cereals, potatoes, yam and other tubers, fish, fruits, meat, vegetables, and spirits. On a state profile, Sokoto, Zamfara, and Plateau residents paid less for food in the period under review, the agency noted.

“In March 2023, food inflation on a year-on-year basis was highest in Kwara (28.84 per cent), Ondo (28.22 per cent), and Lagos (27.92 per cent),”the report further reads.

“Sokoto (18.99 per cent), Zamfara (20.57 per cent) and Plateau (21.38 per cent) recorded the slowest rise in food inflation on a year-on-year basis.

“On a month-on-month basis, March 2023 food inflation was highest in Bayelsa (3.11 per cent), Rivers (3.00 per cent), and Ondo (2.98 per cent), while Bauchi (1.03 per cent), Zamfara (1.08 per cent), and Ogun (1.13 per cent) recorded the slowest rise in food inflation.”

Last month, Oyeyemi Kale, KPMG Nigeria's chief economist and former statistician-general of the federation, warned that policy measures aimed at controlling spending may not be the best strategy for moderating inflation.

The economist was reacting to recent policies (interest rate hike, and the naira redesign policy) by the country's central bank aimed at curbing the current inflationary trend in Nigeria.

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According to Kale, following the CBN's naira redesign policy, currency in circulation has dropped from N3.28trn in December 2022 to N1.38 trn in January and to an estimated N982.09b in February 2023, representing a 235 per cent decline.

“It was expected that the scarcity of redesigned notes, which caused a cash crunch in the economy since January 2023, would stimulate a slowdown in demand-pull inflation, especially given the series of interest rate hikes from the central bank (500 basis points since May 2022).

“This might indicate a drop in output below effective demand, despite the cash crunch, with some producers of goods and services whose activities are cash-based facing challenges purchasing inputs for production or replacing their stock and distributing them across the country.”