Prices of Alcoholic Beverages Slow, as Non-Alcoholic Cost Rises

Despite the weakness of the naira, prices for alcoholic beverages in Lagos remain below their 1 August 2014 levels. The all-Nigeria headline index for alcoholic beverages fell 0.3 per cent month-on-month (m/m) in February, against a prior 3.0 per cent. In Lagos, the alcohol price index fell 0.5 per cent m/m (versus a revised 2.8 per cent m/m prior).
The Standard-Chartered Premise Consumer Price Tracker shows that for both sub-indices, February price declines followed strong monthly gains in January. The pace of pass-through may be slowing following an initial adjustment for a weakening foreign exchange rate.
Following the postponement of presidential and parliamentary elections initially scheduled for 14 February, many businesses in Nigeria have reported a slowdown in activity and restocking. This may explain why the feed-through from an even weaker foreign exchange rate in February appears to have tapered off.
On the other hand, Lagos has seen a much stronger inflationary trend – its non-alcoholic beverages index gained 2.1 per cent m/m in February and is up 9.93 per cent since 1st of August 2014. Prices in Kano also increased in the latest month (+0.5 per cent m/m), although the index was 4.4 per cent below its 1st August level.

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