Inflation rate in Nigeria increased for the first time in five months in January to 12.1 per cent, from the 11.8 per cent achieved a month earlier due to higher food prices and increased government spending towards the April elections.
The National Bureau of Statistics (NBS) which revealed this in a report titled: “Consumer Price Index January 2011,” made available Thursday, said that the monthly change in the composite Consumer Price Index (CPI) was a 1.20 per cent increase, compared with the December 2010 figure. Analysts maintained that the development may trigger an increase in interest rates.
Price of commodities such as bread, sugar, bread, kerosene, cooking gas among others, had increased last month.
The Central Bank of Nigeria (CBN) had its last Monetary Policy Committee (MPC) meeting disclosed its resolve to fight inflation which has stubbornly remained at double digit by adopting various monetary control and tightening measures.
The apex bank had said it is targeting inflation of less than 10 percent. This resulted into the lifting of the Monetary Policy Rate (MPR), the Liquidity Ratio (LR) and banks’ Cash Reserve Ratio (CRR) at the last meeting.
CBN Deputy Governor, Financial System Stability, Dr. Kingsley Moghalu, on Wednesday identified inflationary risk and political spending as major concern to the regulator, adding that the banking watchdog had directed banks not to lend money to politically exposed persons.
The NBC report further explained that the Urban All Items monthly index declined by 1.4 per cent while the corresponding rural index increased by 3.3 per cent compared with the preceding month.
It added: “Average monthly food prices marginally declined by 0.9 per cent in January 2011 when compared with the December 2010 figure. The level of the Composite Food Index was higher than the corresponding level a year ago by 10.3 per cent. The average annual rate of the index was 14.2 per cent for the 12-month period ending January 2011.
“The decrease in the month-on-month index was caused mainly by decline in the prices of some food items like meat, fish, oil and fats, after the festive period. The year-on-year average consumer price level as at January 2011 for Urban and Rural dwellers rose by 7.9 and 15.6 per cent respectively. The percentage change in the average composite CPI for the 12 month period ending January 2011 over the average of the CPI for the previous 12-month period was 13.5 per cent. This was slightly lower than the figure for the preceding month.”
Rising global food prices may also push up inflation, Governor Lamido Sanusi said. Flour millers in Nigeria have raised prices by 7.6 percent because of the increasing cost of wheat on international markets, Emmanuel Ukpabi, Chief Executive Officer of Flour Mills of Nigeria Plc said Thursday.