Nigeria’s headline inflation rose to 21.91 percent in February, indicating 0.09 percent increase from the 21.82 percent recorded in January, according to the latest report shared by the National Bureau of Statistics (NBS) on Wednesday.
The Bureau attributed the rise to increase in prices of different food items amid the cash crunch emanating from the redesigned naira policy by the Central Bank of Nigeria.
“On a year-on-year basis, the headline inflation rate was 6.21% points higher compared to the rate recorded in February 2022, which was 15.70%. This shows that the headline inflation rate (year-on-year basis) increased in February 2023 when compared to the same month in the preceding year (i.e., February 2022),” it said.
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“Looking at the trend, the February 2023 inflation rate showed an increase of 0.09% points when compared to January 2023 headline inflation rate.”
“The contributions of items on a class basis to the increase in the headline index are presented, thus: Bread and Cereal (21.67%), Actual and Imputed Rent (7.74%), Potatoes, Yam and Other Tubers (6.06%), Vegetable (5.44%) and Meat (4.78%).”
The NBS noted that on a month-on-month basis, the percentage change in the All-Items Index in February 2023 was 1.71 percent, which was 0.16 percent points lower than the rate recorded in January 2023 (1.87 percent).
“This means that in February 2023, on average, the general price level was 0.16% percent lower relative to January 2023.
“The percentage change in the average CPI for the twelve months period ending February 2023 over the average of the CPI for the previous twelve months period was 19.87%, showing a 3.15% points increase compared to 16.73% recorded in February 2022. The increases were recorded in all COICOP divisions that yielded the headline index.”
The CBN introduced the naira redesign policy in late October 2022, but its implementation became chaotic due to the insufficiency of the redesigned naira notes. The poor circulation of the new 200, 500 and 1,000 naira notes, which yielded cash scarcity, cast further strains on the economy.
The policy which came as part of efforts to curb money laundering and vote-buying ahead of the elections nearly crippled the informal sector as the banking industry struggles to contain the shift to digital transactions.
The Supreme Court had on March 3, annulled the policy, which it described as an affront to the 1999 Constitution. The judgment follows a suit instituted by 16 states against the federal government, challenging the policy.
However, the CBN did not comply with the judgment until Monday, March 13, when the financial regulator directed banks to start collecting and dispensing the old naira notes until December 31, in compliance with the apex court judgment. This means that Nigeria’s economy is still grappling with a cash shortage. Experts say it will take weeks before economic activities return to normal.