Nigeria’s Composite Consumer Price Index (CPI) rose by 13.4 percent year-on-year in October, according to the monthly price statistics report just released by the National Bureau of Statistics.
“This is slightly lower than 13.6 percent recorded in the previous month in the new CPI series. The monthly change of the CPI was 0.3 percent increase when compared with September 2010,” the report dated 16 November stated.
A Consumer Price Index is expected to measure changes over time in the price level of goods and services, purchased especially by households. The annual percentage change in a CPI is usually used as a measure of inflation.
The nation’s bureau said the urban all items monthly index rose by 0.5 percent, while the corresponding rural index recorded 0.1 percent increase when compared with the preceding month; and that the year-on-year average consumer price level, as at October 2010, for urban and rural dwellers, rose by 11.5 and 15.0 percent respectively.
Food Index
The bureau said average monthly food prices remained stable in October, when compared with September, adding that the level of the Composite Food Index was higher than the corresponding level a year ago by 14.1 percent.
“The average annual rate of rise of the index was 14.9 percent for the twelve-month period, ending October 2010. The marginal fall in the index was caused mainly by slight decrease in the prices of some food items like yam, potatoes, and other tubers, due to the harvest season,” the National Bureau of Statistics said.
Lydia Olushola, an economist and consultant at Skytrend Nig. Ltd., said for the everyday consumer, a rise in CPI means prices of goods go up.
“The problem is when their average wages do not increase in accordance with the CPI, that is, if the CPI rises faster than people’s average wages, then the consumers’ purchasing power declines. They can’t buy as much as whatever it is they usually bought,” Ms. Olushola said.
Experts say inflation effects on an economy can be positive or negative, as the case may be. Inflation rates in Nigeria have peaked as high as 15.6 and as low as 11.6 between October 2009 and October 2010.
Bismarck Rewane, managing director, Financial Derivatives Company, a finance firm, said “Inflation on items less farm produce increased from 1.3 percent to 12.8 in September, though that of food decreased by 1.1 percent to 14 percent, from 15.1 per cent and 11.3 percent in July respectively. Presently, inflation is running at 13.6 percent. The current inflation record is weak, due to fiscal spending,” adding that inflationary pressures are likely to persist in November.
The Central Bank said inflation depicts an economic situation where there is a general rise in the prices of goods and services, continuously. It could be defined as “a continuing rise in prices, as measured by an index, such as the Consumer Price Index (CPI) or by the implicit price deflator for Gross National Product (GNP).”
The bank said price stability does not connote constant (or unchanging) price level, but it simply means that the rate of change of the general price level is such that economic agents do not worry about it. Inflationary conditions imply that the general price level keeps increasing over time.
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