In Nigeria, bread prices have increased rapidly in recent years, as high rates of inflation are reducing the wages of the populace.
The National Bureau of Statistics (NBS) reports that headline inflation rose from 32.15 % in August 2024 to 32.70% in September 2024.
On Tuesday, it reported that the September 2024 month-over-month inflation rate increased by 0.30 % to 2.52%.
Increases in the price of petrol were the main cause of headline inflation, which impacted the economy’s overall price level.
The price of petrol increased for Nigerians from N597.00 to N855.00 in September.
Following the full implementation of petrol price deregulation, the Nigerian National Petroleum Company (NNPC) raised petrol prices last week from N950/litre to N998/litre in Lagos and as much as N1,003 in the northeastern regions. This was the second increase in two months.
Bread From The Morning Table
Over the past six to twelve months, bread prices have increased everywhere. Four months ago, a loaf of bread cost N1,000 at grocery stores; today, it costs between N1,300 and N1,500.
In October 2023, a loaf of bread cost N400, but today, it costs N800 in different sections of Lagos and Abuja.
The prices of all bread ingredients have quadrupled year after year, and the situation for the sector is dire, according to Jude Okafor, national secretary of the Association Master Bakers and Caterers of Nigeria (AMBCN).
He claimed that the government has not yet addressed the sector’s issues and is unwilling to pressure millers to produce flour using alternatives like potatoes and cassava.
THE NEWS CHRONICLES discovered that the price of a 50 kg bag of flour used to make bread has increased by 57.2% from N39,750 in February 2024 to N62,500 today.
The price of another input, a 50kg bag of sugar, has increased by 28.5%, from N68,500 in February 2024 to N88,000.
Additionally, a 20-sachet carton of yeast used to retail for N22,000, but now it sells for N70,000. In 2023, a 15kg bag of butter cost N18,000; today, it costs N42,000. Additionally, the price of 25 kg of vegetable oil has increased from N N40,000 in December 2023 to N 60,000.
Analysts’ Perspectives On Inflation
Razia Khan, managing director and chief economist for Africa and the Middle East at Standard Chartered Bank, said that despite the sharp increase in petrol prices, Nigeria’s inflation rate only slightly increased in September, surprising observers.
Khan disclosed that despite a roughly 45 % increase in gas prices during the month, month-over-month inflation increased by 2.5 %, up from 2.2 % in August. “Despite the approximately 45 % increase in petrol prices, Nigeria’s September inflation increased much more modestly than we expected – only 2.5 % m/m,” she remarked.
The year-over-year inflation rate remained at 32.7 %, which she attributed to a number of factors, including tight monetary policy and slow income growth.
“This likely reflects squeezed income growth and already tight policy, limiting the y/y rise to 32.7%,” Khan said.
Khan cited some encouraging signs in the most recent data, even if food price inflation was still a worry, especially in view of the recent flooding that affected agriculture. “We think this print bodes well for the outlook for inflation overall, signalling little spillover from the hike in PMS prices,” she said, “even though food price inflation is still considerable – with food products up 2.6 percent m/m and imported food up 3.6% m/m.”
Khan predicted that an even more moderate month-over-month increase in inflation was likely to occur in October. She underlined that other economic changes, such as stricter regulatory measures and improved stability in the foreign exchange market, will probably restrain inflationary pressures, even though the entire impact of the subsidy elimination may be delayed.
“With a 500 basis point increase in the Cash Reserve Ratio (CRR) at the end of September, we are more likely to believe that the additional tightening of policy and subsequent FX stabilisation will be more important,” Khan added.
Khan continued by saying that although there are still risks, the most recent inflation data provides some respite because there is little chance of a sudden price spike.
