Economic roundup: Inflation soars as 63% of Nigerian population becomes multidimensionally poor

Welcome to Naijaonpoint’s weekly macroeconomic roundup. It’s time to review some of the top economic news for the week ending November 19.

Let’s start…

Worrying statistics from the NBS

Earlier in the week, the National Bureau of Statistics (NBS) released two reports that worried many Nigerians. The first was, of course, the Consumer Price Index (CPI) report which showed that the inflation rate had risen to 21.09% in October.

The increase in the composite index was due to increases in the core inflation rate and food in the period under review.

Talking about Nigeria’s food inflation rate, it rose to 23.72% in October, which is an increase of 5.39% compared to the rate recorded in October 2021 (18.34%). The increase was driven by a significant increase in the prices of essential foods.

The increase in the food inflation rate comes against the backdrop of nationwide floods that devastated 400,000 hectares of farmland. Analysts predicted that the damage could drive up food prices.

The NBS CPI report also showed Nigeria’s energy inflation rising to 16.8% in October 2022 from 16.4% in September. Naijaonpoint reported that this is the highest rate since March 2017 when the rate stood at 18.9%.

An earlier NBS report showed that Nigerians paid more for petrol, kerosene and diesel from the third quarter of 2022. For example, the price of petrol increased from N189.46 per liter in August 2022 to N191.65 per liter in September 2022.

Finally, in terms of inflation news, Nigeria’s healthcare inflation rate rose to an all-time high of 17.4% in October 2022 from 16.9% in September. This is the highest rate recorded since February 2009, thirteen years ago.

Please note that the CPI Health Index is an index used to measure changes in the cost of health services in the country.

More on rising consumer costs…

Naijaonpoint reported that Nigerian households spent a whopping N57.1 trillion in the first six months of the year, representing an average monthly expenditure of N9.51 trillion on living expenses.

This is based on data from the NBS which further revealed that household spending during the period under review increased by 14.4% from Naira 49.89 trillion recorded in the corresponding period of 2021.

Unsurprisingly, Nigerians have been lamenting the high costs. Last week, they particularly expressed concern that prices will continue to rise despite the naira’s recent gains against the dollar.

Remember that earlier in the week, the naira miraculously recovered to N680/$ after hitting a record low of N900/$. Black market traders attributed the sudden improvement to declining demand and increased currency inflows into the market.

Now, on to the second worst NBS report. It is the report on 133 million Nigerians who are multidimensionally poor. The implication of this is that 63% of the Nigerian population is multidimensionally poor. This is horrible.

The trend is such that 72% of multidimensionally poor Nigerians are concentrated in rural places compared to 42% of those people in urban areas.

offering solutions

Fiscal Policy Partner and Africa Tax Lead at PwC Nigeria, Mr. Taiwo Oyedele, has advised the Nigerian government to change its current poverty alleviation strategy, which involves giving stipends to poor people. According to Oyedele, the current strategy is more to push more people into poverty rather than lift them out of it.

He explained that in order to lift Nigerians out of poverty, governments at all levels must channel their resources to address the dimensions of poverty by building health centres, schools and access roads to farms. He said that all of this should take precedence over the construction of airports and flyovers.

The Nigerian government launched the National Poverty Dashboard Situation Room last week. Naijaonpoint reported that the project was inaugurated by the Minister of State for Budget and National Planning, Clem Agba, who inaugurated the project.

According to him, the need for a poverty and welfare information data hub is to house different features where policy discussions can be hosted, citing that the hub would be used as a tool for a proper understanding of the poverty situation in Nigeria.

The Nigerian government said it would soon start implementing the Vision 2050 report soon, in an attempt to increase the country’s per capita Gross Domestic Product (GDP) to $33,000.

Revealing this at the 28th Nigerian Economic Summit (NES) in Abuja, Finance Minister Zainab Ahmed added that Nigeria’s Agenda 2050 will succeed Vision 2020.

Separate data from the Central Bank of Nigeria (CBN) and the Debt Management Office (DMO) have shown that Nigeria’s total public debt is estimated at $151.3 billion as of June 2022. Interestingly, most of Nigeria’s creditors are Nigerian.

The federal and state governments have a mix of internal and external debts. Internal debt is made up of FGN titles, Treasury bills and, more recently, CBN Ways and Means. In the foreign scenario, Nigeria has debts with countries (bilateral debts) and multilateral institutions such as the World Bank, the IMF and the African Development Bank.

Talking about government debt, the Debt Management Office (DMO) said it raised a sum of N269.15 billion from its November 2022 FGN savings bond issue on behalf of from the federal government, since subscriptions reached 152.9%.

The November debt instrument, which was issued in three tranches, saw a total subscription of Naira 344.01 billion against the initial offering of Naira 225 billion, representing a subscription rate of 152.9%.

Some 30,973 RSA holders changed their pension fund managers in the third quarter of 2022, according to the Naijaonpoint findings. The trade represents an increase of 109% compared to the 14,821 holders who traded in the previous quarter.

The number of RSA transfers processed in Q3 2022 is the highest quarterly number on record since the transfer window opened in November 2020. Total transfers have reached 109,522 since inception.

Data from the monthly oil market report (MOMR) of the Organization of the Petroleum Exporting Countries (OPEC) It showed that Nigeria has maintained its position as Africa’s third-largest crude oil producer by October 2022.

The report further showed that Algeria ranked first as Africa’s largest crude oil producer in October, followed by Angola.

The Naira-US dollar exchange rate appreciated 1.27% to close at N780/$1 on Friday, November 18, 2022 from N790/$1 on Thursday.

Also, the naira strengthened against the US dollar on Friday in the peer-to-peer cryptocurrency market, closing at N780/$1, representing an appreciation of 1.05% compared to N788.28/$1. in the previous trading session. .

… Economic Summary: Inflation soars as 63% of Nigeria’s population becomes multidimensionally poor Read more at … Naijaonpoint.