August Inflation Report

The NBS has released its August inflation report to show –

  • Headline rate 17.01% y/y (17.38% in July):
  • Core rate 13.41% y/y (13.72%); and
  • Food rate 20.30% y/y (21.03%).


  • August’s headline reading declined by 37bps (when compared with the previous month) to 17.01% y/y.
  • Food inflation also recorded a decline (of 73bps). The highest increases were recorded in bread, cereals, milk, cheese, eggs, oils and fats, potatoes, yam and other tubers, meat, coffee, tea and cocoa.
  • The highest increases in core inflation were recorded in prices of footwear, household textile, vehicles, garments, major household appliances, hospital services, catering services, personal care products, among others.
  • On a month-on-month basis, headline inflation increased to 1.0% in August from 0.9% in July.
  • On a y/y basis, imported food price inflation rose to 17.12% y/y from 17.07% y/y recorded in the previous month. NAFEX turnover amounted to USD2.8bn in August according to FMDQ; please note that the total inflow was USD1.3bn with the CBN accounting for 31.93%, while the non-bank corporates accounted for 23.76%.
  • The NBS also tracks headline inflation by state, with the highest, 23.40% y/y in Kogi and the lowest, 14.64% in Kwara. It is worth noting that household baskets vary across states due to different consumption patterns.
  • The CBN’s in-house estimates suggest that inflationary pressure is projected to moderate in the short to medium term, given the potential rebound in output growth, bolstered by the resumption of economic activities. However, the underlying risks of the efficacy of the COVID-19 vaccines against known and newly emerging strains of the virus, the uncertainty as to whether the vaccines could help achieve herd immunity or not and unequal access to the vaccines are some of the headwinds that could undermine this forecast.
  • The MPC is scheduled to hold its next meeting on the 16th and 17th of Sep ’21.

FX dynamics


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