Nigeria’s Inflation Rate Rises to 11.7% After Floods Hit Farms
Nigeria’s annual inflation rate rose for the first month in four to 11.7 percent in October after the country’s worst floods in decades washed away farms and food stores.
Inflation in africa’s largest-oil producer accelerated from 11.3 percent in September, the Abuja-based National Bureau of Statistics said today in an e-mailed report. The median estimate of 13 economists surveyed by Bloomberg was 11.4 percent. Prices rose 0.9 percent in the month.
Food prices, the biggest component of the consumer price index, rose 11.1 percent in October from a year earlier compared with 10.2 percent in September, the Abuja-based statistics agency said in the report today. “The higher food prices continue to reflect the impact of recent floods,” on food production and the “difficulty of moving food products to markets across the country.”
Nigeria’s two biggest rivers, the Niger and the Benue, overflowed their banks as dams let out water following heavy rains, killing 363 people, displacing 2.2 million and affecting almost 8 million people from July to Oct. 31, according to the National Emergency Management Agency. Farming communities along the river banks saw the worst damage.
Agricultural output, which accounts for about 40 percent of gross domestic product, will fall this year due to the impact of the floods, Central Bank of Nigeria Governor Lamido Sanusi said Nov. 15.
The inflation rate remains above the central bank target of below 10 percent. The Monetary Policy Committee left the benchmark interest rate unchanged at a record high 12 percent this year to help support the naira. The rate has stayed below the bank’s forecast of a peak of as much as 15 percent after President Goodluck Jonathan reduced gasoline subsidies in January.
“What we’ve seen in recent months is the steady decline in consumer prices, in year on year inflation, and we still expect this trend to persist in the medium term,” Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd. in London, said by phone Nov. 14.
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