Cost of transportation, major driver of inflation rate, says Zainab

November 15, 2020
91 Views

Nigeria’s Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has revealed that the inflation rate in Nigeria is largely driven by the cost of transportation.

This disclosure was made by the Minister during a virtual consultation and stakeholder’s engagement to discuss the economic and fiscal policy drivers underpinning the Finance Bill 2020 recently.

The recent increases in the retail pump price of petrol, which is used by most of the commercial transporters as energy for the vehicles, have led to sharp increases in transport costs.

According to the latest report from the National Bureau of Statistics (NBS), the average transport fare paid by commuters for bus journeys within a city increased by 7.92% month-on-month and 63.88% year-on-year to N309.73 in September 2020.

\Ahmed revealed that the finance bill contained some interesting new proposals like fiscal relief for mass transit, which is designed to provide support to mass transit by reviewing the duties regime. She said this is because the Federal Government recognizes transportation as one of the major cost drivers in the economy.

She said, “If you look at the rate at which our inflation is going, and you disaggregate the components, you will find that inflation is largely driven by transport cost. So, the essence here is to reduce transportation cost so that businesses will have ease and pass benefits to eventual consumers.”

Nigeria’s inflation rate rose to 13.71% (year-on-year) in September 2020, indicating 0.49% point higher than 13.22% recorded in August 2020, according to the Consumer Price Index (CPI) report, released by the National Bureau of Statistics (NBS).

The report also states that Nigeria has endured a persistent increase in inflationary rate, growing from 12.13% in January to 13.71% in September, which is the highest recorded in 30 months.

Analysts at Financial Derivatives Company Limited, led by foremost economist Bismarck Rewane, said last week that headline inflation was projected to rise to 14.5% in October from 13.71% in September.

They said it meant that inflation would be rising for the 14th consecutive month and would also be the highest level in 33 months. Food inflation will be the most affected as it is estimated to climb to 17.05%.

You may be interested

Ex-China FA President Sentenced To Life Imprisonment For Receiving Bribe
Sports
1 views
Sports
1 views

Ex-China FA President Sentenced To Life Imprisonment For Receiving Bribe

Webby - March 26, 2024

A former president of China’s football association, Chen Xuyuan, has been sentenced to life in prison for accepting more than…

How Do Ethereum Casino Work – Things You Should Know
Sports
1 views
Sports
1 views

How Do Ethereum Casino Work – Things You Should Know

Webby - March 26, 2024

Ethereum casinos are becoming popular with players because they offer many benefits. These casinos offer a wide range of games,…

Bayer Leverkusen Celebrate Boniface’s Return To Full Training
Sports
1 views
Sports
1 views

Bayer Leverkusen Celebrate Boniface’s Return To Full Training

Webby - March 26, 2024

Bayer Leverkusen have celebrated their top scorer Victor Boniface’s return to full training.The Nigeria international was pictured in training with…

Leave a Comment

Your email address will not be published.