Claim: The rise in inflation rate is a global challenge due to COVID-19 and is not peculiar to Nigeria.
Verdict: MISLEADING. Report analysis provided by international media reveals that although inflation prevails in most countries worldwide, COVID-19 isn’t the major cause.
The television news outlet Arise News has reported that the previous administration of President Muhammadu Buhari has defended Nigeria’s inflation rate. He claims that it stems from the global effect of COVID-19, and it’s not peculiar to Nigeria alone.
The presidential spokesperson of the previous administration, Garba Shehu, asserted in a statement titled, “Re: Buhari Leaves Inflation at Highest in 17 Years.”
“This stubbornly high inflation is a worldwide problem, and no nation is immune to it since the global economic downturn triggered by the COVID-19 pandemic,” a portion of the statement reads.
Before the official reaction, the National Bureau of Statistics (NBS) had on Saturday, April 15, 2023, released the April 2023 Consumer Price Index (CPI) and Inflation report.
The April 2023 report details a 22.22% inflation rate which indicates an increase of 0.18% compared with the March 2023 inflation rate of 22.04%.
While reflecting on the inflation rate statistics of other countries and trying to dismiss the notion that Nigeria is the only country experiencing inflation increase, the former president mentioned countries experiencing the same such as France, United Kingdom (UK), Ghana, Turkey, and Pakistan.
“France, which enjoyed a stable average inflationary regime of 4.1 per cent from 1960 to 2022, is today reporting price increases of up to 1,080.36 per cent,” Mr Shehu wrote.
He also referenced Ukraine as having to battle scourging inflation due to the war it is currently facing.
Due to how sensitive the matter is and the crucial period (transition period) that the nation is in, DUBAWA decided to fact-check the claim.
We decided to check the inflation backgrounds of the countries mentioned by the former presidential spokesperson and large economy countries and identify some of the major causes of their inflation.
The state of inflation in other countries and their triggers
Trading Economics reports that the inflation headline in France rose to 5.7% in April 2023 from 5.7% in March 2023. According to the report, the acceleration of energy prices triggered the upward movement.
The report also mentions that the country has remained above the European Central Bank’s target of 2%. Also, the harmonised CPI, which the European Central Bank critically uses as a criterion, ascended to 0.7% monthly and 6.9% annually.
According to the British Broadcasting Corporation (BBC) in the United Kingdom (UK), bread, cereals, and chocolate prices have increased the inflation rate to an all-time 45-year high in Britain. CPI in the country was at 10.1% in March and a decline from February at 10.4%, as detailed in the BBC UK publication. The report also says that although there was high demand for oil and gas after COVID-19 elapsed, the current war between Russia and Ukraine also meant less quantity was available from Russia. It also reduced grain availability, causing global food prices to skyrocket.
In February, the CPI increase was further aggravated by a shortage of salad and vegetables in the UK, causing the country to witness a historical food inflation peak.
In Ghana, the inflation rate fell for the fourth month to 41.2% in April 2023 from 45% in March 2023, according to Trading Economics. Significantly, the figure has achieved the lowest mark in six months due to relative stability in the Ghana cedis, influenced by the high expectations that a concluding deal with the International Monetary Fund (IMF) $3 billion bail-out will soon happen.
Turkey also recorded a significant downward movement in inflation in a sixth consecutive month at 43.7% in April 2023 from 50.5% in March 2023, according to Trading Economics.
Reuters reports that this is coming ahead of the general elections, with incumbent President Tayyip Erdogan predicted to trail his main opponent Kemal Kilicdaroglu as some polls reveal. The cost of living crisis has engulfed household savings under the regime of President Erdogan, who has ruled Turkey for 20 years.
In Pakistan, inflation lingers by a one per cent increase at 36.4% in April 2023, from 35.4% in March, according to Trading Economics. It also relays that the inflation figure is the highest since December 1973 and attributes the unyielding increase to rising commodity and service costs.
According to a media outlet, moneycontrol, the Finance Ministry said that inflation is expected to remain at “elevated” levels “owing to market frictions caused by relative demand and supply gap of essential items, exchange rate depreciation and recent upward adjustment of petrol and diesel administered prices.”
Intellinews writes that the National Bank of Ukraine (NBU) believes that inflation will decline significantly to 14.6% later this year. It hinges on the bank’s monetary policy and the rapid recovery of Ukraine’s energy sector, according to the National Bank Governor, Andriy Pyshnyy.
On a month-on-month basis, there was a significant decline of 0.2% in April from 1.5% in March.
In large economy countries like the United States, monthly inflation slightly dropped to 4.9% in April 2023 from 5% in March 2023, according to Statista. News outlet Consumer News Business Channel (CNBC) reports that the CPI rose to 0.4% in March 2023, attributed to price increases in shelter, gasoline, and used vehicles. However, these were somehow managed by declines in fuel prices, new vehicles, and food at home.
According to Trading Economics, China also witnessed a fall in its annual inflation rate to 0.1% in April 2023 from 0.7 in March 2023. The report mentions that the figure is the lowest since its last deflation in February 2021 amid an uneven economic rebound after removing a zero-COVID policy.
Trading Economics reports that food inflation dropped to a 13-month low (0.4% against 2.4% in March), attributed to a slowdown in pork prices and a dip in the cost of fresh vegetables.
Core consumer prices (excluding volatile food and energy prices) rose to 0.7%, and the consumer price dropped to 0.1% monthly.
NBS’ report about the causes of Nigeria’s increase in inflation
TheCable reports that the analysis given by the NBS on the factors responsible for the increase in inflation in Nigeria are “food and nonalcoholic beverages (11.4 per cent); housing, water, electricity, gas, and fuel (3.69 per cent)”.
Other factors are “Clothing and footwear (1.69 per cent), transport (1.43 per cent), furnishings, household equipment and maintenance (1.11 per cent).
“Education (0.87 per cent); health (0.66 per cent); miscellaneous goods and services (0.37 per cent); restaurants and hotels (0.27 per cent) are also among the category.
“Alcoholic beverage, tobacco and kola (0.24 per cent); recreation and culture (0.15 per cent) and communication (0.15 per cent) further has significant rise.”
Buhari’s claim is misleading. Although inflation prevails in most countries worldwide, factors such as food and energy prices, politics, currencies etc., rather than COVID-19, have influenced inflation rates in these countries.