Experts raise concern as Nigeria’s inflation falls to 17.38%
Economic experts have expressed concerns over the reported decline in the country’s inflation rate to 17.38 per cent in July.
The National Bureau of Statistics, in its Consumer Price Index report for June, said on Tuesday that inflation rate fell by 0.37 per cent from 17.75 per cent in June.
It said increases were recorded in all Classification of Individual Consumption According to Purpose divisions that yielded the headline index.
On a month-on-month basis, the headline index rose by 0.93 per cent in July, which was 0.13 percentage points lower than the rate recorded in June (1.06) per cent.
The urban inflation rate increased by 18.01 per cent (year-on-year) in July from 18.35 per cent recorded in June, while the rural inflation rate increased by 16.75 per cent in July from 17.16 per cent in June.
Meanwhile, the corresponding rural inflation rate in July was 15.73 per cent, compared to 15.36 per cent recorded in June.
According to the NBS, food inflation fell to 21.03 per cent in July 2021 from 21.83 per cent in June.
A professor of Economics at Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella, in a telephone interview with our correspondent, said he disagreed with the announced headline inflation rate for July.
He said the numbers revealed by the NBS did not reflect the realities of the Nigerian economy.
“They are politically-influenced numbers. I do not understand how they arrived at reduced the month-on-month headline inflation. The prices of goods in the market are rising at a fast rate and people are complaining, but they are saying headline inflation reduced. I don’t agree,” he said.
The PUNCH had reported last week that the Director of Monetary Policy Department at the CBN, Dr Hassan Mahmud, said, “We will also see the inflation number coming down less than 13 per cent by the end of the year and further down to the NBS projection of single digit by 2022 or the middle of 2022.
When asked about the feasibility of what Mahmud said, the Head of Economics Department, Pan-Atlantic University Lagos, Dr Olalekan Aworinde, told our correspondent, “Inflation was 17.75 per cent in June, and reduced to 17.38 per cent in July. It is not as though inflation is coming down; it is just that the rate at which prices of goods and services are increasing is at a decreasing rate. It is not as if inflation is coming down, it is only increasing at a decreasing rate.
“What the CBN has said concerning single digit inflation, I do not want to be pessimistic about it, but in reality, there are a number of indices that we need to look at that will ensure we have a single digit inflation. For instance, the recently passed Petroleum Industry Act indicates that the prices of goods and services will go up.”
He added, “One of the products that brings us together in terms of economic activities in Nigeria is petrol. At any particular time the price of petrol increases, there is a multiplier effect on goods and services that we buy in the market.
“With the Petroleum Industry Act that we have in place, once its implementation starts, the implication is subsidy will have to be removed. If subsidy is removed, people will have to pay higher prices.