Despite CBN policy, Nigeria’s inflation keeps rising, hits 18.72%

Despite the claim by the CBN Monetary Policy Committee announcement that it had put a policy in place to check the steady rise of Nigeria’s consumer price index , also known as inflation, the report of the National Bureau of Statistics (NBS) on Wednesday indicated a rise from 18.55 percent in December to 18.72 percent in January 2017.

According to the NBS, consumer prices witnessed steady year-on-year increase for the 12th straight month compared with similar trend in September 2005.

‘The price index has continued to rise for food, housing and utilities, averaging 12.32 percent from 1996 until the unprecedented jump in 2017 of over 18.72 per cent in the year under review.

“It reached an all time high of 47.56 percent in January of 1996, but later recorded the lower of -2.49 per cent in January of 2000,” said the report.

Compared to January of 2016, cost of food, namely for bread and cereals; meat, oil and fats, and fish suffered a rise in prices, while prices of imported food increased slightly by 21 per cent.

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Additional upward pressure came from: housing and utilities (27.2 percent, at the same pace as in December); education (21 percent from 21.6 percent); clothing and footwear (17.9 percent from +18.8 percent); furnishings and household equipment (13.9 percent from 13.6 percent) and transport (17.2 percent from 17.3 percent).

An economist, Dr. David Itsueli of the Lagos Business School, said the steady rise in inflation is an indication that policy makers are yet to get to the root of the factors making it impossible for them to proffer solution to the high inflation, which helps to undermine purchasing powers of consumers of goods and services.

”The Nigerian case is defying all economic principles, among them being that the treasury bills are the best instrument to mop up excess cash liquidity in the system. To the best of my knowledge the authorities are constantly selling various range of the instruments, from where the excess cash that is causing the current high inflation should have gone under,” he stated.

He added that the CBN, through its MPC, should go back to the drawing table to ascertain what should be done that had not been properly done.

 

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