The Consumer Price Index, which measures inflation rate has dropped to 18.12 per cent in April, compared to 18.17 per cent the previous month.
According to the National Bureau of Statistics, the CPI dropped to 18.12 per cent in April, compared to 18.17 per cent in March.
Analysts and market observers have cautioned that despite the seeming break in the upward trajectory, the coast is not yet clear for celebrations.
They said it is currently difficult to assume that the marginal drop in headline inflation marked the beginning of a downward trend in inflation rate.
Also, food inflation slowed to 22.72 per cent in April, compared to 22.95 per cent the previous month.
However, core inflation strengthened to 12.74 per cent in April from 12.67 per cent in March.
According to the CPI report for April 2021, which NBS released on Monday, urban inflation slowed to 18.68 per cent in the review period from 18.67 per cent in March.
However, month-on-month, the headline inflation increased by 0.97 per cent in April from 1.56 per cent in March while the food index rose by 0.99 per cent from 1.9 per cent in March.
Core Inflation also grew by 0.99 per cent in April from 1.06 per cent in March.
Analysts said the key factors responsible for current hyperinflationary pressures were yet to be addressed, adding that the marginal decline does not represent the reality on the ground.
Reacting to the NBS report, Head of Research at Agusto Consulting, Mr. Jimi Ogbobine, said: “We can’t say we are winning the war against inflation because it is still above 18 per cent; especially because at 18 per cent, inflation is still at double-digit, whereas the limit of the CBN’s inflation target is nine per cent.
“I think we need to start looking at our current inflation as a security issue even beyond the basic of economics and beyond economic preview. It means it is affecting lots of families, it is increasing poverty levels and it means that the purchasing power of disposable income is weak and when you bring in high unemployment and an increase in working poor.”
He said the Central Bank of Nigeria could play an important role in reducing the high inflation figures.
On his part, Head, Retail Investment, Chapel Hill Denham, Mr. Ayodeji Ebo, said: “The inflation figures came as a surprise, but looking at it, it was majorly due to the high base effect of food inflation, which was a result of last year’s lockdown, which started in April and led to a sudden jump in prices.”
On what can be done to further lower the country’s high inflation rate, Ebo said: “The issue of insecurity needs to be tackled and we need to also increase production so there is enough supply.
“We need to also intensify investments into agriculture so that yields can also increase. Other things are long term, which would help reduce distribution like having a functioning rail network would really impact on the cost of distribution.”
The Chairman, Chartered Institute of Bankers of Nigeria, Abuja Branch, Prof. Uche Uwaleke, said the risks to the inflation outlook were still present.
“It is difficult to interpret this marginal drop in headline inflation to mean the beginning of a downward trend in the inflation rate.
“This is because the risks to the inflation outlook are still present. These include insecurity, which directly impacts food inflation, the recent devaluation of the naira, and the likely hike in the pump price of fuel and electricity tariffs,” he added.
According to him, it is possible the marginal drop in food inflation may not reflect the actual drop in food prices but from the base effect associated with the methodology of computing CPI on a year-on-year basis.