Nigeria’s Inflation Rate Leaps to 19.64% in July of 2022, Highest in 17 Years

The National Bureau of Statistics’ recently issued Consumer Price Index (CPI) report for the month of July 2022 revealed that Nigeria’s inflation rate reached a 17-year high of 19.64% YoY in the month of July 2022 (+1.04ppts from 18.60% recorded in June 2022). According to the report, the uptick was as a result of the rising cost of products and services, which is made worse by the depreciating value of the naira. On a month-on-month headline inflation rate in July 2022 was 1.817%, which was 0.001% higher than the rate seen in June 2022 (1.816%).

Source: NBS, Alpha Morgan Research

Subsequently, food inflation reached its highest in 14 months as it soared by 22.02% YoY (+1.42ppts from 20.60% YoY recorded in June 2022). According to the report, the NBS attributed the expansion in the food index to rises in the cost of bread and cereals, food items, potatoes, yams, and other tubers, as well as meat, fish, oil, and fat. The food inflation rate in July was 2.04% on a monthly basis, which is 0.01% lower than food the 2.05% reported in June.

Also, in July 2022, the core inflation rate—which does not include the fluctuating costs of agricultural products—was 16.26% YoY (+51bps from 15.75% YoY recorded in June 2022). The uptick was buoyed by the growth in the price of Gas, Liquid fuel, Garment, Solid fuel, Cleaning, Repair and Hire of clothing and Passenger transport by road, passenger transport by air, garments, cleaning, repair and hire of clothing, major household appliances whether electric or not, wine, clothing materials, other articles of clothing and clothing accessories and liquid fuel. In July 2022, the core inflation rate was 1.75% on a monthly basis. When compared to the 1.56% reported in June 2022, this was an increase of 0.20%.

Looking into the month of August, we anticipate further expansion in the inflation rate caused by global economic slowdown and the continuous increase in food prices and energy costs. Consequently, we expect headline inflation to rise by 50bps to 20.14%
YoY for August 2022.