According the report released by the National Bureau of Statistics (NBS), Headline Inflation in August 2023 spiked by 172 basis points on a year-on-year basis to 25.80% (July 2023: 24.08%). On a month-on-month basis, Headline Inflation jumped to 3.18% (July 2023: 2.89%).

All Items Less Farm Produce

Before July, “all items less farm produces” is referred to as the Core inflation. This was because the prices of items that constitute energy were regulated by the government , hence less fluctuation in price changes, e.g., Petroleum Motor Spirit (PMS). Due to the deregulation of the sector and the removal of the fuel subsidy, all the items that constitute energy are now determined by market forces and hence their prices are termed volatiles. Therefore, Core inflation is referred to as all items index less farm produces and energy. Core Inflation jumped to 21.15% on a year-on-year basis, while on a month-on-month basis it was up to 2.18% from 2.11% in July 2023.


Headline inflation numbers are expected to remain high as the impact of fuel subsidy removal and FX unification becomes more apparent. Although, we expect the start of harvest season to moderate the rise in Food Inflation in the near term.

Policy Expectations and Potential Impact

Headline Inflation remains at record levels, and significantly above the Central Bank’s (CBN) target of 9%. Therefore, we expect the current hawkish stance to be sustained. Higher interest rates are expected to stabilize in the financial markets, particularly in the foreign exchange market.

Click here “August 2023 Inflation – Food Inflation Spikes as Policy Reforms Becomes More Apparent” to view the full report.

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