In January 2021, domestic inflation continued its climb, reaching 16.47% YoY at the end of the month. The food and core indices both contributed to this uptrend and have shown no signs of letting up. In February, we note that while post-harvest supplies of key food items like cereals, yam, and other tubers were expected to moderate demand pressures, heightened supply chain bottlenecks and insecurity issues in the food-producing regions posed significant threats to food supply.
In particular, we point to the Shasha crisis which occurred in Oyo state, as well as the strike action by the Amalgamated Union of Foodstuff and Cattle Dealers of Nigeria (AUFCDN) around mid-February, which triggered a diversion of food supply away from the South to neighbouring countries.
On the other hand, we attribute the rising prices of non-food items to higher transport (exacerbated by artificial scarcity which pushed pump prices of petrol slightly higher) and healthcare services costs. In addition to these, the FX devaluation in the I&E window to NGN410/USD (vs prev. NGN400/USD) in February and a corresponding movement in the parallel market rate to NGN475/USD also played their part. In sum, we expect consumer prices to rise by 16.98% YoY in February.
MERISTEM RESEARCH
Stanbic IBTC Asset Management has implemented strong measures to safeguard its customers from an alarming…
Michael Owhoko, Ph.D The root cause of Nigeria’s problem is, unarguably, an inappropriate system of…
Stanbic IBTC Pension Managers has launched the third edition of their highly anticipated FUZE Talent…
Stanbic IBTC Holdings, a member of Standard Bank Group, has unveiled the fourth edition of…
Stanbic IBTC Pension Managers has again made a significant mark on Nigeria's cultural landscape by…
NOVA Bank, one of the latest commercial banks in Nigeria, may be experiencing a major…
This website uses cookies.