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Economic experts have expressed concerns over the reported decline in the Nigeria’s inflation rate to 17.38 per cent in July.
Based on the Consumer Price Index report for July, National Bureau of Statistics, said on Tuesday August 17, that inflation rate fell by 0.37 per cent from 17.75 per cent in June.
These 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 initial 1.06 percent rate recorded in June.
The urban inflation rate increased by 18.01 per cent (year-on-year) in July from the initial 18.35 per cent recorded in June, while the rural inflation rate increased by 16.75 per cent in July from the 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.
However, Professor Sheriffdeen Tella of the Dept. of Economics, Olabisi Onabanjo University, Ogun State, on a telephone interview, said he disagreed with the announced headline inflation rate for July.
He noted that the numbers revealed by the NBS did not reflect the realities of the Nigerian economy.
In his words “They are politically-influenced numbers. I do not understand how they arrived at the reduced 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.
Based on a report last week from Dr. Hassan Mahmud, Director of Monetary Policy Department at the CBN 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.
However when the Head of Economics Department, Pan-Atlantic University Lagos, Dr Olalekan Aworinde was asked about the feasibility of this, he told newsmen, “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”.
He also stated emphatically that “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.”
Adding that, “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.
He pointed that “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.
