by Bosun Awoniyi
LAGOS, Nov. 17 (Xinhua) -- Nigeria's consumer price index(CPI), a main gauge of inflation, has been on a steady rise, creating more worries over excessive inflation in the West African country and concerns over the trend, analysts said.
According to the latest report of the Nigeria Bureau of Statistics (NBS), the country's CPI further rose from 13.71 percent year-on-year in September to 14.23 percent year-on-year in October.
The NBS data show the CPI rise in October was largely driven by increases in prices of food items with the composite food index rising by 17.38 percent year-on-year in October compared to 16.66 percent in September.
There has been a steady rise in inflation rate from 11.24 percent since September 2019.
Local observers are worried about the risk of rising inflation, stressing that the Nigerian economy could further slide amid a global economic setback caused by the COVID-19 pandemic and the fear of a possible second wave of contagion.
Timothy Olawale, head of the Nigeria Employers' Consultative Association (NECA), a member organization of the Organized Private Sector of Nigeria, expressed worry over the rising trend of the inflation rate in the country.
The rise suggested that the policy options provided by the Central Bank of Nigeria(CBN) in taming the gory head of inflation needed critical review, Olawale said in a statement sent to Xinhua on Tuesday.
"It is instructive to note that the persistent increase in food prices, caused by border closures, restrictions in the forex market and insecurity predominantly in the northern states has further heightened the situation," the business expert added.
According to him, the inflationary situation is further compounded by the recent #EndSARS protest against police brutality, which limited the movement of persons and goods or services across most cities and the rising cost of transportation.
"Since the deregulation of petrol prices, the country has witnessed petrol increase by almost 30 percent in the last four months, which suggests a continuous increase in transport cost," the NECA head said.
On his part, Muda Yusuf, the director-general of Lagos Chamber of Commerce and Industry (LCCI), said in a statement released in Lagos that the potency of monetary policy instruments in tackling inflation was weak.
He projected that inflation was unlikely to abate till after the festivities due to demand-side issues.
"To every inflation situation, there are demand and supply-side issues, and from what I'm seeing, due to the large demand expected during the Yuletide, it is unlikely to abate," he said.
Yusuf listed the variables impacting domestic prices to include transportation costs, logistics challenges and exchange rate depreciation.
Others, he said, are forex liquidity issues, value added tax increase, climate change, insecurity in farming communities and structural bottlenecks to production.
The expert added that any mitigation measures will have to be situated in the context of these variables.
According to him, the apex bank has in recent months focused on boosting growth to improve output and moderate inflation.
"With the imminent recession, this is perhaps an appropriate policy choice," he said.
"For an economy seeking to quickly recover and create jobs, monetary policy tightening is not an option," Yusuf added.
Nigeria recorded its index case in Lagos, the economic hub, on February 27. The NCDC's epidemic curve shows the country has reached its COVID-19 peak between early June and late August with a record high of 790 cases recorded on July 1. There is a downward trend in daily infections since the end of August with most of daysdiv> reporting less than 200 cases.
However, health officials expressed concerns that there might be a second wave because of recent protests against police brutality and neglect of safety guidelines.
In a recent exclusive interview with Xinhua, John Oladejo, the director of the health emergency, preparations and response at the NCDC, said the public health agency is working hard to block the second wave of COVID-19 infections.
"Concerning whether there is going to be a second wave, we are working hard to ensure that we prevent that. You will recall that there were the recent protests and many people were gathering together. If anyone of them had the COVID-19, it means it could spread all over," said John. Enditem