A gentle increase in headline inflation

The latest report from the NBS has headline inflation y/y at 11.2% in August. This is the first uptick (by 10bps) following a consistent slowdown for eighteen successive months. Food price inflation rose from 12.9% to 13.2% y/y while the core measure slowed from 10.2% to 10.0%. Our expectation, shared with wire services, was 11.4% y/y for the headline measure.


  • The headline rate rose but by below 1.0% m/m from January through to April. In August, m/m inflation was 1.05% compared with 1.13% recorded in the previous month. The pattern for food prices was slightly different. An uptick in m/m inflation to 1.42% was recorded, compared with 1.40% recorded in July.

  • The recurring clashes between farmers and herdsmen in the country’s agriculture hub has contributed to stubbornly high price rises in food inflation. The NBS commentary noted increases in bread and cereals, potatoes, yam, meat, vegetables, fish, fruits and oils and fat.

  • The report also tracks inflation by state, with the highest 12.9% y/y in Yobe in August and the lowest 8.3% in Kwara. However, it cautions that household baskets vary across states.

Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research


  • For September, we see a rise in the headline rate to 12.0% y/y. In the months ahead, we should see some impact of the expansionary fiscal policy.

  • At its next meeting scheduled to hold later this month, we see the monetary policy committee (MPC) considering another unchanged stance or a rate hike.

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