The National Bureau of Statistics has said Nigeria’s headline inflation rate increased to 19.64 per cent on a year-on-year basis in July, the highest since 2005, in the same vein crypto traders in Nigeria are saving in stablecoins to forestall the volatility the local currency Naira is undergoing.
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The Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics, Prince Semiu Adeniran, said this in the Consumer Price Index for July 2022 released by the bureau in Abuja on Monday.
As Naira devaluation continues to affect the wallets of locals, many crypto fans are jumping on the stablecoin bandwagon. Now more than ever, the value of Naira to dollars today as compared to the value in 2022 all the way to 2015, is boosting this move.
Stablecoins enjoy a one-to-one ratio. For Nigerians, this means stablecoin prices are pegged to a certain ratio with the U.S. dollar. For example, purchasing a stablecoin of the value of $2 will still be valid later on for the same price. I.e. inflation does not affect the value. Furthermore, stablecoin is safe as it is typically regulated by a trusted body, while BUSD is regulated by the New York State Department of Financial Services.
Back on Nigeria’s inflation, giving a breakdown of the report in a statement, Adeniran said the CPI measures the average change over time in the prices of goods and services consumed by people for day-to-day living.
According to him, it is a core macroeconomic indicator used in the derivation of the inflation rate for policy, planning, and monitoring of an economy.
Adeniran said the report showed that in July 2022, on a year–on–year basis, the headline inflation rate was 19.64 per cent.
“This is 2.27 per cent points higher compared to the rate recorded in July 2021, which was 17.38 per cent.
“This shows that the headline inflation rate increased in July 2022 when compared to the same month in the previous year of July 2021.
“This means that in July 2022, the general price level was 2.26 per cent higher than in July 2021,’’ Adeniran said.
He said increases were recorded in all Classification of Individual Consumption by Purpose divisions that yielded the Headline Index.
Adeniran said the increase in inflation was caused by an increase in food index attributed to the disruption in the supply of food products.
The statistician-general also said the increase in inflation was caused by an increase in the cost of transportation arising from the higher cost of energy.
According to him, the increase in the inflation rate was also due to an increase in import costs as a result of currency depreciation, as well as a general increase in the cost of production.
He said on a month-on-month basis, the headline inflation rate in July 2022 was 1.817 per cent, which was higher than the rate recorded in June 2022 at 1.816 per cent.
“The percentage change in the average CPI for the twelve months ending July 2022 over the average of the CPI for the previous twelve months period was 16.75 per cent.
The statistician-general said on a month-on-month basis, the food sub-index in July 2022 was 2.04 per cent lower than the 2.05 per cent recorded in June 2022.
“The index for all items less farm produce (Core inflation), which excludes the prices of volatile agricultural produce stood at 16.26 per cent in July 2022 on a year-on-year basis.
“This was higher when compared to 13.72 per cent recorded in July 2021. On a month-on-month basis, the core sub-index was 1.75 per cent in July 2022 higher when compared to 1.56 per cent recorded in June 2022.
He said the highest increases were recorded in prices of gas, liquid fuel, solid fuel, passenger transport by road, passenger transport by air, garments, cleaning, repair and hire of clothing.