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FAAC dropped 5.38% to N1.14trn in May, as FDC projects inflation data

Total revenue disbursed to the three tiers of government declined by 5.38% to N1.14 trillion in May from N1.21 trillion in April. The fall in the distributed amount is mainly attributable to the sharp drop in corporate income tax. The current impasse on the minimum wage could become a major problem for revenue and inflation in the months ahead.

A more disturbing concern is that a higher minimum wage can pose inflation risk. Financial Derivatives Company (FDC) has projected headline inflation to rise by 0.63% to 34.32% in May. Similarly, it forecasts food inflation to increase by 0.67% to 41.20% and core inflation to grow by 0.36% to 27.20%.

The price of an average-sized avocado increased by 100% to N500 (yoy)

The price of an average-sized avocado doubled to N500 from N250 in May 2023, due to robust demand for industrial and personal consumption. Despite this, avocado farming in Nigeria remains largely subsistence, creating a supply gap exacerbated by post-harvest losses, pest and disease management, and poor farming practices. Until these issues are addressed, avocado prices are expected to remain high.

FDC’s M.D., Mr. Bismarck Rewane, and senior analyst, Halima Adediran, discussed these and other burning economic issues on Channels TV Business Morning and Business Incorporated programmes, respectively.

Click the link to watch the video.

Enjoy your read!