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Inflation rate rises to 15.70% in Nigeria as sustained fuel scarcity bites harder

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Nigeria’s official data source, the National Bureau of Statistics (NBS) has revealed that the consumer price index (CPI), which measures the rate of increase in the price of goods and services, rose to 15.70 percent in February 2022, amid soaring fuel prices and scarcity.

The latest CPI, according to the NBS “is 1.63 percent points lower compared to the rate recorded in February 2021 (17.33) percent but the highest since October 2021 (15.99%).

This means that the headline inflation rate slowed down in February when compared to the same month in the previous year”.

According to the report, increases were recorded in all classifications of individual consumption according to purpose (COICOP) divisions that yielded the headline index.

The simple meaning of inflation is a “sustained upward movement in the overall price level of goods and services in an economy. Holding all else constant, this corresponds with a loss of purchasing power for a currency utilized within the economy”.

That is, your ₦500 now behaves like ₦450, by virtue of what could be purchased with it.

The report further says  “On month-on-month basis, the headline index increased to 1.63 percent in February 2022, this is 0.16 percent rate higher than the rate recorded in January 2022 (1.47) percent,”

“Increases were recorded in all COICOP divisions that yielded the Headline index. On month-on-month basis, the Headline index increased to 1.63 percent in February 2022, this is 0.16 percent rate higher than the rate recorded in January 2022 (1.47) percent”

The percentage change in the average composite CPI for the twelve months period ending February 2022 over the average of the CPI for the previous twelve months period was 16.73 percent, showing 0.14 percent point from 16.87 percent recorded in January 2022.

The urban inflation rate increased to 16.25 percent (year-on-year) in February 2022 from 17.92 percent recorded in February 2021, while the rural inflation rate increased to 15.18 percent in February 2022 from 16.77 percent in February 2021.

Nigeria’s current inflation rate is not unconnected with the recent fuel scarcity that has hit the country Nigeria’s statistician-general, Simon Harry, hinted last month  “As you are bringing your commodities to the market for sale, you will be thinking of adding some amount on the selling costs so that you will be able to recover the costs of transportation”

“So that gives us a negative signal that is capable of affecting not just inflation rate, but also other macro-economic variables such as the Gross Domestic Product (GDP) and even the unemployment rate.

“I can, however, assure you that certainly, it is not the best for the economy and if we must maintain a stable macroeconomic environment, this kind of crisis certainly is not the best for it is not needed.”

In 2021, Nigeria’s inflation rate was projected to reach 16 percent. In January 2021, the inflation rate in urban areas of Nigeria grew by 17 percent compared to the previous months, while the rural inflation rate experienced an increase of 15.9 percent. In 2020, Nigeria recorded one of the highest inflation rates worldwide.

 

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South Africa’s FM, Naledi Pandor, wants quick solution to Ghana, MTN tax dispute

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South Africa’s foreign minister Naledi Pandor wants the tax dispute between the tech company and the Ghanaian tax authorities solved.

The minister on Friday called MTN Group, which has a presence in 19 countries in Africa and the Middle East, and the Ghana Revenue Authority to find a solution to a $773 million tax dispute.

South Africa’s Department Of International Relations and Cooperation said in a statement, Minister Pandor was briefed on the issue this week and called “on the parties involved to do everything possible to find an amicable solution.”

Two weeks ago, the South African mobile operator giant revealed that its Ghanaian subsidiary has received a bill for back taxes of around $773 million. The billing came after the tax authority audited MTN for the years 2014 to 2018 and inferring that it had under-declared its revenue by about 30% during the period.

MTN said it disputes the “accuracy and basis” of the assessment and that it would fight it.

MTN Ghana is the largest company in Ghana by market capitalization as the annual data revenue of MTN Ghana (Scancom PLC) amounted to over 2.7 billion Ghanaian cedis (GHS) in 2021.

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Ivory Coast to increase cocoa processing capacity with new plants

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Ivory Coast, the largest cocoa-producing country in the world, has hinted that it will increase the amount of cocoa it processes domestically to 49%.

According to the head of the sector, the regulator said on Friday, the increase is projected to begin in production starting from October with the addition of several new plants.

The new plants will allow the country to process more than 1 million tonnes of cocoa annually, making it the world’s leading cocoa grinder,

Ivory Coast boasts of annual production of about 2.2 million tonnes with 35-40% processed in the country and the rest exported, but the government has a goal of increasing that to at least 50%.

The country recently signed a deal with the United Arab Emirates for the construction of a new plant in San Pedro with a grinding capacity of 120,000 tonnes, said Yves Brahima Kone, director general of the Coffee and Cocoa Council (CCC), who was in Abu Dhabi this month to open a new CCC office.

“This permanent representation (in Abu Dhabi) is the fruit of our new vision for Ivorian cocoa that we want to export all over the world. This office will allow us to explore markets in Asia, the Middle East, and North Africa,” he told journalists

Ivory Coast also expects two new factories financed by China to enter into production in October, with a production capacity of 50,000 tonnes each, Kone said.

In November, the two biggest cocoa producers, Ivory Coast and West African neighbour, Ghana pushed for higher prices for their farm products under the Living Income Differential (LID) and vowed to charge a premium of $400 per tonne on all cocoa sales, starting with the 2020/21 harvest.

The lack of technology and industries to process its produce has fanned discussions about Africa being a raw material economy and extractive centers for industrial western countries that are advanced, able processed and positioned to maximize the resources.

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