Rising inflation hobbles GDP growth, economic recovery


Despite complaints of surges in the prices of goods and services by Nigerians, the National Bureau of Statistics (NBS) on Monday disclosed that the nations’ inflation rate fell to 15.99 per cent in October, from 16.36 in September.

According to its Consumer Price Index (CPI) report, the October figure showed a steady decline in the country’s inflation rate over a seven month period beginning from April.

The headline inflation, driven by soaring food prices, had accelerated consistently for about three years, hitting 18.17 per cent in March. But since April, the rise in inflation has been slower, according to NBS statistics.

There have been reports of skyrocketing food prices in major cities across the country in recent times with adverse effects on household budgets. This has been majorly attributed to rising insecurity in the country, especially in the North and some other states where most of the essential food items for the nation come from.

Expectedly, some economists and other stakeholders have dismissed the position of NBS, saying the bureau needed to do more to convince Nigerians, especially those who rely on their data for research and critical decision-making, that the figures are not doctored to achieve a predetermined objective.

According to a market survey conducted by The Guardian, the cost of protein had increased by almost 100 per cent in the last one year, just like certain plant-based food crops such as beans.

In Lagos, a crate of eggs (30 units) in most supermarkets sells for between N1,800 and N2,150. On the street, the price has also increased from N1,200 in 2020 to between N1,700 and N2,200 depending on the size. That puts the year-on-year (YoY) increase at approximately 62 per cent.

A kilogramme of chicken laps has also increased by over 60 per cent YoY. The commodity, which cost about N1500 about a year again now goes for about N2,400 at popular supermarkets, while a whole chicken sells for N5,000. A live chicken (old layer) costs about N2,500-N3,000 and a broiler costs a minimum of N5,000 in many live chicken markets in Lagos.

At a popular supermarket in Lagos, an 800-900gm sachet of milk is between N2,300 and N3,000, depending on the brand. About a year ago, the price of the essential commodity was in the range of N1,700 and N2,000.

A kilogramme of Titus fish is currently N1,600 just as Croaker fish is N2,500 as against the average price of N850, implying that fish has increased by over 100 per cent in the past year.

The survey, however, revealed that only the price of beans, as a plant-based source of protein, has reduced significantly in the last two months as new harvests hit the market.

At Daleko market, Lagos, a bag of brown beans was N50,000 last month. But it has dropped to N32,000, while a big bag of sweet beans also fell from N105,000 last month to N75,000. The price of a small bag of white beans also slowed from N90,000 last month to N65,000.

In Ibadan, Oyo State, findings revealed that a crate of medium-sized eggs costs about N1,700, while a crate of big eggs is sold for between N1,900 and N2,000. The same price range applies in Kwara State. But in Abuja, a crate of eggs is about N2,500, while a kilogramme of chicken is about N3,000. The percentage increase across markets is between 40 and 70 per cent.

A medium-sized tuber of yam is N1,200 in a popular supermarket in Lagos while it costs about N1,000 on the street. A similar size of yam sold for about N700, or about 40 per cent less than the current price in open markets a year ago.

It is a similar trend for groundnut oil and onion. A bag of onion, for instance, has increased by over 70 per cent, with a five-litre groundnut oil increase from N4,000 to N7,000 at popular markets. Onion, though at a slower speed than oil, has increased by over 30 per cent YoY.

A professor of applied economics, Godwin Owoh, described the inflation figures as unusable, saying they were doctored to fulfill some political objectives. He said the figures would fall apart when subjected to professional scrutiny by an independent body.

For Prof. Leo Ukpong of the American University of Nigeria (AUN), the reason consumers could not feel the drop in inflation was that the average things that consumers buy are either not included in the basket of goods used in the calculation of the CPI or very little is included in the index.

Also reacting, a former President of Trade Union Congress (TUC), Peter Esele, wondered the metrics used by the NBS to measure the inflation rate.

Esele said: “I am sure many Nigerians will be asking if those working in the NBS come from the moon. Even the price of naira, which is the exchange rate, has gone up. The price of cooking gas has gone up by more than 100 per cent. The price of every commodity in the market has gone through the roof. So, I ask the NBS, what metrics did they use?”

Esele pointed out that if the prices of goods and services are rising at a faster rate in America, Britain as well as in all of Europe while it is in reverse in Nigeria, it suggests that Nigeria has a different definition of what inflation rate is.

“Why is the price of cooking gas going up? That is the trend in the international market. The British government is subsidising gas now because winter is here. What is the Nigerian government subsidising for its citizens?

“No one needs to speak about inflation decelerating or accelerating. The market is there to determine what the inflation rate is. The NBS cannot be saying exactly the opposite of what the market and the pockets of Nigerians are saying,” he stressed.

But the NBS in its latest report claimed that the inflation rate fell by 0.37 per cent from 16.36 per cent in September. The report said on a month-on-month basis, headline index increased by 0.98 percent in October 2021, which is 0.17 per cent lower than 1.5 per cent recorded in September.

It added that urban inflation rate increased by 16.52 per cent (year-on-year) in October from 14.81 percent recorded in October 2020.

Meanwhile, the rural inflation rate increased by 15.48 percent in October from 13.68 percent in October 2020, the Bureau added.

“The average annual rate of change of the Food sub-index for the twelve-month period ending October 2021 over the previous twelve-month average was 20.75 percent, 0.04 percent points from the average annual rate of change recorded in September 2021 (20.71) percent,” the report added




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