How insecurity, transportation bottle neck drove inflation to a 17-year high

Apparently, the soft target by the bandits, Boko Haram, unknown gunmen, which is food scarcity is gradually being achieved. This is as the scare created on roads is affecting transportation of food stuff to the southern part of the country is taking its toil.
It will be recalled that the bad elements started their campaign by destroying farm lands, followed by kidnaps on major raod leading to scarcity of food.
States that, ordinarily should be self suffient in food production are now leading the inflation index.
Akwa Ibom State recorded the highest inflation rate in the month under review with 22.88 per cent, closely followed by Ebonyi State with 22.51 per cent. Others include Kogi (22.08 per cent), Bayelsa (21.6 per cent), and Rivers State (21.37 per cent).
In terms of food inflation rate, Kwara State recorded the highest with 29.28 per cent, followed by Akwa Ibom (27.22 per cent). Kogi State recorded 26.08 per cent food inflation rate in July 2022, while Ebonyi, and Ekiti State recorded 25.83 per cent and 24.78 per cent respectively.
The result is that, inflation rate, the average rate of change in the prices of goods and services climbed to a near 17-year high in July, fueled by bread, cereal, gas and transport costs, said the National Bureau of Statistics (NBS)..
Inflation rose to 19.64 per cent in July, compares to 18.6 per cent recorded in the previous month of June 2022.
The last time Nigeria’s inflation was above 19.64 per cent was in September 2005 when it rose to 24.32 per cent, according to Nairalytics, a web portal that publishes Nigeria’s historical macroeconomic data. Notably, the uptick in the inflation rate was driven by increases in the food and core index.
Further breakdown of the report shows that the urban inflation rate rose by 2.08 per cent to 20.09 per cent in July 2022 from 18.01% recorded in July 2021, while the rural inflation rate hit 19.22 per cent from 16.75 per cent recorded in the corresponding period of 2021.
Food inflation
The closely watched indicator rose to its highest level in 14 months, standing at 22.02 per cent in July 2022, representing a 1.42 per cent-point increase compared to 20.6% recorded in the previous month. On a month-on-month basis, the food inflation rate in July stood at 2.04 per cent, this is 0.01 per cent lower than 2.05 per cent recorded in the previous month.
According to the NBS, the rise in food inflation was caused by increases in prices of bread and cereals, food products, potatoes, yam and other tubers, meat, fish, oil, and fat.
Meanwhile, the average annual rate of food inflation for the twelve-month period ending July 2022 over the previous twelve-month average was 18.75 per cent, which represents a 1.42 per cent points decline from the average annual rate of change recorded in July 2021 (20.16 per cent).
The ‘’All items less farm produce’’ or Core inflation, which excludes the prices of volatile agricultural produce stood at 16.26 per cent in July 2022, compared to 15.75 per cent recorded in the previous month. This also represents the highest core inflation rate since January 2017, when the rate stood at 17.8 per cent.
On a month-on-month basis, the core inflation rate was 1.75 per cent in July 2022. This was up by 0.20 per cent when compared to 1.56 per cent recorded in June 2022.
Notably, the highest increases were recorded in prices of Gas, Liquid fuel, Solid fuel, Passenger transport by road, Passenger transport by Air, Garments, Cleaning, Repair and Hire of clothing.

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