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Nigeria’s Inflation Rate Jumps to 20.77% In September 2022- NBS

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Nigeria’s Inflation Rate Jumps to 20.77% In September 2022- NBS

… Blames Food Supply interruption, Import cost hike, due to persistent currency depreciation***

Nigerians lamenting the seemingly unbearable conditions of living may no longer need to look further as the National Bureau of Statistics (NBS), says Nigeria’s headline inflation rate jumped to 20.77 per cent on a year-on-year basis, in September 2022.

This is contained in a statement issued by Prince Semiu Adeniran, the Statistician-General of the Federation and Chief Executive Officer, of the National Bureau of Statistics (NBS), highlighted this on Monday, in Abuja, through the  Consumer Price Index (CPI) and Inflation Report for September.

Adeniran said the figure is 4.14 per cent points higher compared to the 16.63 per cent recorded in September 2021.

“This indicates that in September 2022, the general price level was 4.14 per cent higher, relative to September 2021.”

He said factors responsible for the increase in the annual inflation rate include interruption in the supply of food products, increase in import cost due to the persistent currency depreciation and a general increase in the cost of production.

Adeniran said on a month-on-month basis, the headline inflation rate in September was 1.36 per cent, which was 0.41 per cent lower than the rate recorded in August 2022 at 1.77 per cent.

“This means that in September 2022, the headline inflation rate on a month–on–month basis declined by 0.41 per cent, relative to August 2022.”

He said that the factor responsible for the decline in the monthly inflation rate in the last two months was a decline in the changes in the food index.

According to him, this is relative to the reference month index, which is due to the present harvest season.

He said the percentage change in the average CPI for all items index for the 12 months ending September 2022 over the average of the CPI for the previous 12-month period was 17.43 per cent.

”This is showing a 0.60 per cent increase compared to 16.83 per cent recorded in September 2021.”

Adeniran said increases were recorded in all Classification of Individual Consumption by Purpose (COICOP), divisions that yielded the Headline index.

He said the food sub-index increased by 23.34 per cent on a year-on-year basis in September 2022,  adding that the inflation was 3.77 per cent higher compared to the rate recorded in September 2021 at 19.57 per cent.

“This rise in food inflation was caused by increases in prices of bread and cereals, food products, potatoes, yam, and other tubers, oil, and fat.”

The statistician-general said on a month-on-month basis, the food inflation rate in September was 1.43 per cent, adding that this was a 0.54 per cent decline compared to the rate recorded in August 2022 at 1.98 per cent.

According to him, this decline is attributed to a reduction in prices of some food items like tubers, palm oil, maize, beans, and vegetables.

Adeniran said the average annual rate of food inflation for the 12 months ending September 2022 over the previous 12-month average was 19.36 per cent.

”This was a decline of 1.35 per cent points from the average annual rate of change recorded in September 2021 at 20.71 per cent.”

He said in September 2022, consumer price index for urban consumers rose by 4.06 per cent on a year-on-year basis.

“That is in September 2022, the urban inflation rate was 21.25 per cent higher compared to the 17.19 per cent recorded in September 2021.

“On a month-on-month basis, the urban inflation rate was 1.46 per cent in September 2022, this was a 0.34 per cent decline compared to August 2022 at 1.79 per cent. ”

Adeniran said the corresponding 12-month average for the urban inflation rate was 17.94 per cent in September 2022, showing a 0.53 per cent increase compared to the 17.41 per cent reported in September 2021.

He said the inflation rate for rural consumers in September 2022 was 20.32 per cent on a year-on-year basis, which was 4.24 per cent higher compared to 16.08 per cent recorded in September 2021.

”On a month-on-month basis, the rural inflation rate in September 2022 was 1.27 per cent, this is a 0.48 per cent decline compared to August 2022 at 1.75 per cent.”

Adeniran said the corresponding 12-month average for the rural inflation rate in September 2022 was 16.94 per cent, showing a 0.68 per cent increase compared to the 16.26 per cent recorded in September 2021

On the states’ profiles, he said all items’ inflation rate for  September 2022 on a year-on-year basis was highest in Kogi at 23.82 per cent, followed by Rivers at 23.49 per cent, and Benue at 22.78 per cent.

“While the states with the slowest rise  were Abuja with 17.87 per cent followed by Borno with 18.12 per cent, and Adamawa with 18.42 per cent.”

The statistician-general said on a month-on-month basis, the state all items index for September 2022 recorded the highest rate in Jigawa at 2.58 per cent, followed by Yobe at 2.22 per cent and Benue at 2.05 per cent.

“While the states with the slowest rise were Abuja at -0.72, followed by Sokoto with -0.19 per cent and Adamawa with 0.25 per cent.”

 

Economy

FG Threatens To Open Borders for Cement Importation Over Price Hike

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Palpable fear has gripped cement manufacturers following the Federal Government’s threat to throw open the nation’s borders for cement importation if the product manufacturers fail to bring down the cost.

The Minister of Housing and Urban Development, Mr Ahmed Dangiwa issued the threat on Tuesday in Abuja at a meeting with Cement and Building Materials Manufacturers.

The meeting was summoned to address the astronomical increase in the cost of cement nationwide.

The minister expressed concerns that in the past couple of months, the country had witnessed a recurring alarming increase in the prices of cement and other building materials.

“Clearly, this is a crisis for housing delivery. An increase in essential building materials means an increase in the prices of houses.

“We are not the only country facing this challenges, many countries are facing the same type of challenges that we’re facing, some even worse than that.

“But, as patriotic citizens, we have to rally round the country when there is crisis, to ensure that we do our best to save the situation,” he said.

The minister added: “Honestly speaking, we have to sit down and look at this critically and know how you should go back and think of it.

“The government stopped importation of cement in other to empower you to produce more and sell cheaper

Bags of cement

“Otherwise the government can open the borders for mass importation of cement, the price will crash, but you will have no business to do”.

Dangiwa said the reasons given by cement manufacturers for the price increase – high cost of gas and manufacturing equipment – were not enough for such astronomical pricing.

He expressed his displeasure at the position of  Cement Manufacturer Association of Nigeria (CEMAN) that the association “does not interfer with the pricing of cement”.

He said the association should not just fold  its arms when things were going wrong.

“One person cannot be selling at N3500 per bag and another selling at N7000 per bag and you cannot call them to order.

“The association is expected to monitor price control, otherwise the association has no need to exist,” he said.

Earlier, Mr Salako James, Executive Secretary, CEMAN, said the housing policy of the administration of President Bola  Tinubu was laudable and every responsible Nigerian has to key into it.

He, however, identified some areas of concern and appealed to the government to look into them to tackle the issue of cement pricing.

Salako identified the challenges of gas supply to heavy users like the cement industry and urged the government to create a window whereby gas will be bought with Naira instead of dollar.

He also complained about the distribution channel, stressing tha there was a great difference between the price from the manufacturers and the market price.

He, therefore called for government intervention to help stabilise the situation and bring sanity to the economy.

At the end of the meeting, the minister directed that a committee should be constituted to review the situation and come out with implementable resolutions that would benefit the common Nigerian.

The three major cement producers, Dangote Plc, BUA Plc, and Lafarge Plc were represented as well as other industry stakeholders.

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Economy

Cement Price Can Be Lower Than FG, Manufacturers’ Projection — Association 

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…Warns that high price could lead to corner-cutting and building collapse

The National Association of Block Moulders of Nigeria (NABMON) says the agreement between the Federal Government and three major cement manufacturers that a 50kg bag of cement, for now, is not supposed to sell for more than N7,000 to N8,000 is faulty.

The National President, Mr Adesegun Banjoko, said this on Tuesday in Lagos.

Recall that the parties, at a meeting on Monday, said that the ideal price of  a 50kg bag of cement for now should be between ₦7,000.00 and ₦8,000.00 depending on location.

They agreed that the current higher prices of cement in parts of the country were abnormal.

The main manufacturers of cement in the country are Dangote Plc, BUA Plc and Lafarge Plc.

According to Banjoko, there is no reason for the price of cement to be sold even at the projected prices, since limestone, which is a key ingredient, is readily available in Nigeria.

He expressed fears that the high price would lead to corner-cutting and building collapse.

The NABMON president expressed the belief that the government and manufacturers could do better and offer lower prices.

Bags of cements

He suggested a reduction or elimination of customs duties on other imported materials used in cement production, adding that this would incentivise manufacturers to lower their prices.

He, therefore, proposed a target price of ₦3,500 to ₦5,000 per bag.

Banjoko said, “There are three issues that make me disagree with the government and the main manufacturers.

“First, limestone is sourced in Nigeria; agreed they have some few other materials they bring in from abroad.

“But if the government is really concerned about life and property lost to building collapse, they should either remove custom duties on such items or reduce them by half to encourage the manufacturers to come down to between N3, 500 and N5, 000.”

He also advised the government to temporarily halt road construction projects that use cement.

Banjoko said that this would free up available cement for vital projects and potentially reduce demand, leading to lower prices.

The NABMON president warned that the high price of cement had added to the existing tensions in the country.

He urged the government to act cautiously with essential commodities like cement, emphasising its impact on public well-being.

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Economy

NGX: Bullish Sentiment Persists, Investors Gain N329bn

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Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

…Unilever Nigeria Plc, Julius Berger lead Losers’ table 

Bullish sentiment persisted on Thursday at the Nigerian Exchange Ltd. (NGX) equity market, as the market indices rose by 0.58 percent.

Specifically, investors gained N329 billion or 0.58 percent, as the market capitalisation closed at N56.961 trillion, as against N56.632 trillion recorded on Wednesday.

The All-Share Index also appreciated by 0.58 percent or 601.72 points to settle at 104,100, compared to 103,498.28 posted in the previous session.

As a result, the Year-To-Date (YTD) return rose to 39.22 percent.

Continuous buy interests in the shares of BUA Cement, BUAFoods, and Geregu kept the market in the positive terrain.

A total of 284.49 million shares valued at N6.91 billion were exchanged in 8,168 deals, as against 426.86 million shares valued at N12.11 billion exchanged in 8,654 deals.

However, analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 42.89 percent.

Guaranty Trust Holding Company(GTCO) led the activity table in volume and value with the trade of 56.61 million shares worth N2.22 billion.

Transcorp followed with 33.17 million shares valued at N418.31 million, while United Bank of Africa(UBA) traded 18.38 million shares worth N442.96 million.

Also, Mutual Benefits Assurance sold 16.76 shares valued at N11.48 million and AXA Mansard traded 12.51 million shares worth N75.57 million.

On the gainers’ table, University Press Ltd.(UPL) led in percentage terms of 9.96 percent to close at N2.87, followed by Juli Plc by 9.84 percent to close at N1.34 per share.

Mutual Benefits gained 9.38 percent to close at 70k, Daar Communications rose by 8.82 percent to close at 74k, while Honeywell Flour garnered 7.50 percent to close at N4.30 per share.

Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

Conversely, Unilever Nigeria Plc led the losers’ table by 9.80 percent to close at N16.10, Julius Berger lost 9.64 percent to close at N50.60, while Morison Industries Plc shed 9.60 percent to close at N2.23 per share.

May & Baker Nigeria Plc depreciated by 6.52 percent to close at N6.45 and National Salt Company of Nigeria (NASCON) dropped 5.37 percent to close at N59.04 per share.

Market breadth closed negative with 26 declining stocks outnumbering 23 advancing ones.

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