Nigeria's inflation rate drops to 11.02% in August, the lowest in more than 3 years

A towel with a print of the Nigerian naira is displayed for sale at a street market in the central business district in Nigeria's commercial capital Lagos February 4, 2016. REUTERS/Akintunde Akinleye/File Photo
  • Nigeria’s inflation drops to lowest in three and a half years.
  • The rate has been falling steadily since May 2019.
  • CBN MPC will meet next week to decide on key lending rates as inflation falls.

Nigeria's inflation rate dropped to 11.02% in August from 11.08% in July 2019, the National Bureau of Statistics (NBS) said on Tuesday, September 17th.

This figure is 0.06% points lower than the rate recorded in July 2019 and this is the lowest since January 2016.

According to NBS, disinflation continued in August 2019 despite several pronouncements regarding restrictions on the import of some food items, minimum wage, and the recent border closures.

“All major indices slowed except urban inflation year on year

“On a month-on-month basis, the Headline index increased by 0.99% in August 2019. This is 0.02% rate lower than the rate recorded in July 2019 (1.01%),” the report states.

Key highlights from the August inflation report:

  • Urban and rural inflation 

The urban inflation rate increased by 11.48% (year-on-year) in August 2019 from 11.43% recorded in July 2019, while the rural inflation rate increased by 10.61 % in August 2019 from 10.64% in July 2019.

On a month-on-month basis, the urban index rose by 1.04 percent in August 2019, down by 0.03 from 1.07% recorded in July 2019, while the rural index also rose by 0.93 percent in August 2019, down by 0.03 from the rate recorded in July 2019 (0.96%).

The corresponding twelve-month year-on-year average percentage change for the urban index is 11.62 percent in August 2019. This is less than 11.64% reported in July 2019, while the corresponding rural inflation rate in August 2019 is 10.95 percent compared to 10.97% recorded in July 2019.

  • Food Inflation

In August 2019, food inflation on a year on year basis was highest in Kebbi (17.20%), Kano (16.08%) and Adamawa (15.95%), while Bayelsa (10.22%), Katsina (9.64%) and Kogi (8.97%) recorded the slowest rise.

On month on month basis, however, August 2019 food inflation was highest in Akwa Ibom (2.56%), Enugu (2.37%) and Ogun (2.17%), while Kogi (0.09%), Benue (0.05%) and Delta (0.03%) recorded the slowest rise.

The drop in inflation rate increase the purchasing power of citizens as the price of goods and services fall. It also allows people to save more.

The Central Bank of Nigeria (CBN) will hold its 269th meeting of the Monetary Policy Committee (MPC) next week.

At the meeting, members of the country's monetary authority will decide on key lending rates as inflation falls steadily since May 2019.

In March 2019, the MPC loosen interest rate to 13.5% from 14% as part of an attempt to stimulate growth and signal a new direction.

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