The consumer price index showed that as at December 2015, inflation stood at 9.6 per cent year-on-year in December, up 0.2 percentage points from November, the National Bureau of Statistics revealed on Sunday, January 17.
According to the NBS, the increase in the headline index was driven by higher prices within key divisions which contribute to the index, particularly imported food items and drinks, as well as clothing and footwear and transportation as a result of intermittent PMS supply shortages.
Food price inflation accelerated to 10.6 per cent year-on-year in December 2015 from 10.3 per cent in November.
All major food groups which contribute to the Food sub-index increased at a faster pace during the month with the exception of the Milk, Cheese and Eggs group, the NBS said.
Inflation had risen to 9.4 per cent in November after a drop to 9.3 per cent in September, moving further out of CBN single digit target band.
According to analysts at Financial Derivatives Company Limited, who say inflation is expected to rise to 9.5 per cent, exchange rate pressure, intermittent fuel scarcity, policy uncertainty and trade restrictions contributed to a higher consumer price index in December.
“Increased demand due to seasonal festivities resulted in higher food prices. Furthermore, the fuel scarcity that spilled over from November led to a spike in transport fares.”
Similarly, analysts at Standard Chartered Bank say sampling shows a 0.64 per cent rise in inflation, noting that items subject to foreign exchange restrictions, such as rice and tomato paste recorded the highest price gains with price increases of between nine to 18 per cent between June and December 2015.
Meanwhile the Nigeria’s inflation rate climbed to the highest in more than two years in September as food prices soared, exceeding the central bank’s target for a fourth month.