LAGOS (Reuters) – Higher food prices pushed up annual inflation in Nigeria last month after borders with neighboring countries were closed in a crackdown on smuggling.
Nigeria closed parts of its borders in August to fight smuggling of rice and other goods. The head of customs confirmed last month that all trade in goods via land borders had been halted indefinitely.
Annual inflation was 11.61% in October, up from 11.24% in September, the National Bureau of Statistics said on Monday — the highest rate since May 2018. Consumer inflation had dropped to it lowest in almost four years in August.
A separate food price index showed inflation at 14.09% in October, compared with 13.51% a month earlier.
“This rise in the food index was caused by increases in prices of meat, oils and fats, bread and cereals, potatoes, ham and other tubers, fish and vegetables,” the statistics office said in its report.
“The rise in food inflation does suggest that border closures may have played a part in temporarily pressuring prices higher,” said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered.
Shoppers at a market in the capital, Abuja, told Reuters the price of many food items, particularly rice, had risen in the last few weeks.
“Food items are very expensive in the market. When you go to a store they will tell you that is because the border is closed,” said housewife Naomi Nguher, who said she was given this reason for high rice prices at four different shops.
Sherifat Ajala, a rice wholesaler in the commercial capital Lagos, said Nigeria’s bad roads were delaying the transportation of the grain, further preventing the supply from meeting high demand.
“Trucks will spend almost two or three weeks on the road before they bring the rice,” he said.
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Last week the West African country, along with neighboring Benin and Niger, agreed to set up a joint border patrol force to tackle smuggling between the nations after a meeting between their foreign ministers.
The central bank is due to set its benchmark interest rate next Tuesday. The bank, which has targeted single-digit inflation, held its main interest rate at 13.5% at its last meeting, in September.
“Given the increase in inflation, we now expect that policymakers will leave their key rate on hold,” John Ashbourne, senior emerging markets economist at London-based Capital Economics, said in a note on Monday.
Reporting by Alexis Akwagyiram; additional reporting by Angela Ukomadu and Abraham Achirga; editing by Larry King
Coy: Dangote Cement Plc
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- This report observed the financial numbers of Dangote Cement for the nine months ended September 30th2019, compared them with similar numbers released in 2018, so as to establish growth and rightly rate the company.
Market Update for The Week ended November 15 and Outlook for Nov 18-22, 2019
Nigeria’s equity market, over the past week, rebounded on improved demand for stocks as Treasury Bills and other money market rates dropped sharply at the end of primary market auction on Wednesday, shedding 150 basis points, when compared to that of October.
This was the first time the 91-day and 182-day bills would be offered at single-digit rates of 7.8% and 9% respectively, since June 15, 2016, just as that of 364-day instruments went for 10%, but remained below the nation’s current inflation rate of 11.24%.