Nigeria’s inflation will rise to 16.56% in February – GTI

Nigeria’s headline inflation is expected to rise in the month of February, going by political instability and economic headwinds.

The GTI Securities Limited said this in its ‘Weekly Economic and Capital Market Report’ released on Saturday.

According to its findings, the measure of the average change in the price level of both food and non-food items will rise by a minimum of nine basis points to 16.56 per cent year-on-year from 16.47 per cent reported by the National Bureau of Statistics in January 2021.

It said, “We believe that the moderate spate will be driven by a collective rise in the Core inflation (i.e., non-food items price index) and Food inflation (i.e., food price index).

“Also, our stand is backed on the projected aftermath of five predominant drivers within the month, which includes; insecurity, Conflict report between traders in some regions, climate change, increase in energy tariff, and high cost of transportation.”

According to GTI, the recent food blockage from the North to the South, and increasing rift between herdsmen and farmers are expected to negatively influence food price inflation.

“Therefore, we expect the food price sub-index to rise to 21.89 per cent y/y or 1.98 per cent m/m) from 20.57 per cent or 1.83 per cent last month,” it said.

It said the “unpredictable climate vagaries’ such as extreme temperature, drought, or flood, would further impact on the headline inflation.

“Nigerian Meteorological Agency forecasted a below-normal rainfall occurrence over some parts of the country for the year particularly in the North-western zone”, this has more of a negative impact on staple crops productivity such as maize, rice, yams, among others.”