Due to the harvest season, food availability in the Nigerian market increased in August, bringing headline inflation down to 32.15 percent.
The price of tomatoes, peppers, yams, and other food items fell, causing inflation to decline from 33.40 percent in July 2024 to 32.15 percent in August 2024, according to the National Bureau of Statistics (NBS).
This happens while food inflation, a significant contributor to overall inflation, decreased from 39.53 percent in July to 37.52 percent in August.
In a note, analysts at CardinalStone stated, “We attribute the deceleration to the food basket, which moderated to 37.52 percent year-on-year, largely supported by the onset of the harvest season.”
In their daily morning note last week, FBNQuest analysts forecast that Nigeria’s headline inflation would decrease even more in August.
“Looking ahead, we expect headline inflation to taper further in August due to the impact of the positive base effect and the continued food harvest season,” they stated.
Our correspondents conducted a poll in August of major Nigerian cities, and the results showed that the average cost of necessities was down. This was good news for Nigerians struggling with high inflation that had been worsening since last year.
In August, the average cost of a large basket of tomatoes in Lagos decreased by 58 percent, from N120,000 to N50,000.
The bundle cost N60,000 and N75,000 in Onitsha in well-known markets like Ochanja and Ose. Prices in Abuja’s Wuse and Dei Dei markets ranged from N45,000 to N60,000.
The average price of a 50kg bag of white garri sold for N65,000, down from N75,000 in July. Meanwhile, the average price of a small bucket sold for N2,300 went down from N4,000 in July, a 42.5 percent decrease.
In Lagos, the price of a small bucket of Irish potatoes dropped by 66% over a few months to N4,000 from an average of N12,000 at that time.
A small basket of Habanero pepper plummeted to an average of N13,000 in August, compared to N35,000 at the top of the price spike in May-June, representing a 63% decline.
Similarly, a small bucket of chili peppers went from selling for N3,500 to N8,000 the previous month, while a bag went from N120,000 to N60,000.
AfricaFarmer Mogaji, the CEO of X-Ray Consulting, stated in August that “household pressures remain skewed to food and with the recent drop in prices, especially in key staples, pressure will be reduced.”
Core inflation, which does not include energy and volatile agricultural produce, increased from 27.47 percent in July 2024 to 27.58 percent in August 2024, despite a reduction in headline and food inflation.
Analysts are concerned that the recent increases in petrol prices could undo the benefits, though.
The price of petrol climbed from N617/litre to N885/litre in August. Since the Nigerian National Petroleum Company (NNPC) is no longer purchasing petroleum products from the Dangote refinery and is instead forgoing expensive fuel subsidies, the price has increased even higher to N950 per litre in Lagos and more than N1,019 in Borno State.
In response to inquiries, Abiodun Olorundenro, managing partner of Prasinos Farms, stated, “We are going to see another spike in food prices, and the surge in fuel prices is going to affect the government’s efforts to tackle inflation.”
“Any vehicle that runs on petrol will be impacted by the recent gasoline price increase and scarcity. Logistics expenses will also rise, affecting farmers’ output costs,” Olorundero said.
He said that Nigerians may enter a new cycle of rising food prices.
