From Isaac Anumihe, Abuja
Nigeria’s inflation rate recorded a significant uptick in February 2016, hitting an all time high of 11.4 per cent, 1.7 per cent points higher than January’s 9.6 per cent.
This is the first time the country’s inflation rate is galloping to double digit in several years. The last administration met it at a double digit, but left it at 8.5 per cent when it exited on May 29, 2015.
According to National Bureau of Statistics (NBS), the agency responsible for the statistics gathering, the faster pace of increases which led to the overall increase in the headline index were recorded across almost all major divisions which contribute to the headline index with the exception of the restaurants and hotels division which increased, albeit at a slower pace.
After increasing at the same pace for two months, the pace of increases of food prices as recorded by the food sub-index increased at faster pace in February. The food index increased by 11.3 per cent, up by 0.71 per cent points from rates recorded in January. During the month too, all major food groups which contribute to the Food sub-index increased at a faster pace during the month with the exception of the potatoes, yams and other tubers; and sugar, jam, honey, chocolate and confectionery groups.
Imported food items as well as other necessary inputs to producing key local staples such as bread continued to drive the food index higher.
The food index increased by 11.3 per cent (Year on-year) 0.7 per cent points higher from rates recorded in January. The highest price increases were recorded in the fish, vegetables and bread and cereals groups for the second consecutive month. On a month-on-month basis, the food sub-index increased by 1.4 per cent in February, 0.45 per cent points higher from rates recorded in January.
“All groups which contribute to the food sub-index increased at a faster pace, with the exceptions of the potatoes, yams and other tubers; sugar, jam, honey, chocolate and confectionery; and milk, eggs and cheese groups. The average annual rate of change of the food sub-index for the twelve-month period ending in February 2016 over the previous twelve month average was 10.2 per cent, 0.2 per cent points from the average annual rate of change recorded in January (10.0 per cent).
The “All items less Farm Produce” or Core sub-index, which excludes the prices of volatile agricultural produce increased at a faster pace in February. The index increased by 11.0 per cent during the month, 2.2 per cent points from 8.8 per cent in January as all key divisions which contribute to the index increased at a faster pace with the exception of the Restaurants and Hotels division. On a month-on month basis, the Core Sub-index increased at a faster pace in
February, increasing by 2.7 per cent from 0.8 per cent in January. In February, the highest price increases were recorded in the Electricity, Books and Stationery groups, and Liquid Fuels groups. The average twelve month annual rate of rise of the index was recorded at 8.7 per cent for the twelvemonth period ending in February 2016, 0.3 per cent points higher from the twelve month rate of change recorded in January” the report, made available to Daily Sun, said.
On how it arrived at this level, the report said: “The CPI (Consumer Price Index) measures the average change over time in prices of goods and services consumed by people for day-to-day living. The construction of the CPI combines economic theory, sampling and other statistical techniques using data from other surveys to produce a weighted measure of average price changes in the Nigerian economy. The weighting occurs to capture the importance of the selected commodities in the entire index. The production of the CPI requires skills of economists, statisticians, computer scientists, data collectors and others.
Key in the construction of the price index is the selection of the market basket of goods and services. Every month, 10,534 informants spread across the country provide price data for the computation of the CPI. The market items currently comprise of 740 goods and services regularly priced.
The first stage in the calculation of the CPI is the collection of prices on each item (740 goods and services) from outlets in each sector (rural or urban) for each state. Prices are then averaged for each item according to sector across the state. The next step is to use the average price to calculate the basic index for each commodity: The current year price of each commodity is compared with a base year’s price to obtain a relative price” ENDS