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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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Emerging African enterprise, Harvest Group, spreads reach to Zambia, launches fillings stations, foundation

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One of Africa’s emerging conglomerates, Harvest Group of Companies Limited, has made bold its announced plan to expand its business reach by opening a chain of filling stations in Zambia.

The Group, which has business interests across sectors like energy, e-commerce, logistics, hospitality, and infrastructure development had announced that it would open forty filling stations in the East African country by year-end 2022.

Speaking recently at the commissioning of Harvest retail outlet on the International Airport axis in Lusaka, the Group’s chairman, Ugo Ikoro-Ngadi remarked that “Harvest Group is making huge strides that are not only bolstering our bottom line and transforming the Zambian and sub-Saharan African economy but also improving lives of people.”

The chairman, Ikoro-Ngadi further revealed that the group’s commitment to human development has birthed the Harvest Foundation through which it aims “to incubate at least 50,000 small businesses across Africa in the next half decade “through mentoring, knowledge-sharing and financial support.”

“As a responsible corporate entity, we will keep our promises to impact communities around us, especially vulnerable African women and youths” he added.

He also admitted the group’s understanding of the challenges that may lie ahead in its recent quest but reiterated that as perceptive entrepreneurs, they see bright prospects.

“Our convictions are guided by market intelligence which shows Africa’s youths as an emerging powerhouse, and the continent as an investment destination.” He added.

With over $10 million in annual revenue and the capacity to handle other non-oil offerings that are associated with filling stations, Harvest has the vision is to be the most innovative distributor of quality refined petroleum products in Sub-Saharan Africa.

Petroleum products contribute 9.4% to the total national energy demand in Zambia. The country imports all its petroleum products, that is, petroleum feedstock and finished products.

But the distribution line is largely local, a turf which players like Harvest Group of Companies hope to dominate. The products are distributed to various government-owned depots where Oil Marketing Companies lift the finished products and distribute them to their own depots, service stations, and commercial customers.

Zambia’s Minister of Energy, Peter Kapala while speaking at the commissioning in Lusaka, said that the government was keen on reforms in the energy sector and formulation of policies that are targeted at specific areas of interest for the private sector and centred on the ease of doing business.

The minister also mentioned that such investments are products of “deliberate and intentional private sector-supporting policies fully and meaningfully employed” by the government.

Harvest Group’s investment in Zambia is capable of “empowering the mass of underserved African women and vulnerable youths” in the country.

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Nigeria: Despite high oil theft, fuel subsidy rises to ₦525.714 billion in August

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Nigeria’s oil subsidy regime has continued to bleed the country of public funds as subsidies rose to 525.714 billion nairas ($1.22 billion) in August.

According to figures submitted to the government by a state oil company, Nigerian National Petroleum Company Limited (NNPC), the August number brings the total spent in 2022 to 2.568 trillion Naira,

Reports say oil production in August averaged 1.18 million barrels per day, well below the nation’s OPEC quota of 1.8 million bpd, due in large part to theft from pipelines that has curtailed production.

Nigeria’s oil auditing agency, NEITI, indicated that in 2019, the West African country lost 42.25 million barrels of crude oil to oil theft, valued at $2.77 billion.

Despite her increasing debt profile, Nigeria’s government in January postponed its planned removal of subsidy on petroleum products till further notice. Petrol subsidy payments reportedly gulped overN1.15 trillion 2021 alone, resulting in low revenue for federal, state, and local governments to cater to developmental projects.

The Finance Minister, Zainab Ahmed in July revealed that West Africa could spend up to 6.72 trillion nairas ($16.2 billion) next year on subsidies.

Although Nigeria is one of the largest oil producers in the world, the West African country does not refine crude oil locally. State-owned Nigerian National Petroleum Corporation (NNPC) has four refineries, two in Port Harcourt (PHRC), and one each in Kaduna (KRPC) and Warri (WRPC) but none has worked to capacity for years despite several investments to succinate the refineries.

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