Nigeria Inflation Skyrockets, IMF Kicks

A month after it said that inflation rate increased from 17.9 per cent in September to 18.3 per cent in October in 2016, the National Bureau of Statistics, NBS, has given 18.55 as current rate

The NBS in a report issued in Abuja said Consumer Price Index (CPI), increased by 18.55 per cent (year-in-year) in December 2016 from 18.48 per cent recorded in November.

“The increase in the inflation rate in October to 18.3 per cent is expected due to the volume of imports that came into the country.

“The continued importation of consumer goods and other related commodities are triggering inflation,’’

The CPI, which measures inflation, is 0.07 per cent points higher from the points recorded in November.

Giving a breakdown of the statistics, the NBS said ,“Communication and Restaurants and Hotels recorded the slowest pace of growth in December, growing at 5.33 per cent and 8.91 per cent (year-on-year) respectively.

“The Food Index rose by 17.39 per cent (year-on-year) in December 2016, up by 0.20 per cent points from rate recorded in November (17.19) per cent.

“During the month, all major food sub-indexes increased, with Soft Drinks recording the slowest pace of increase at 7.66 per cent (year on year).’’

“During the month, the highest increases were seen in Housing, Water, Electricity, Gas and Other Fuels, Clothing and Footwear and Education, growing at 27.27, 21.62 and 17.84 per cent respectively.’’

On a month-on-month basis, the report stated that the Headline index rose by 1.06 per cent point in December, higher from the rate recorded in November (0.78) per cent.

It said that the urban index rose by 20.12 per cent (year-on-year) in December from 20.07 per cent recorded in November, and the rural index increased by 17.20 per cent in December from 17.10 per cent in November.

“On month-on-month basis, the urban index rose by 1.08 per cent in December from 0.78 per cent recorded in November, while the rural index rose by 1.04 per cent in December from 0.79 per cent in November.

“The percentage change in the average composite CPI for the twelve-month period ending in December 2016 was 15.7 per cent, higher from the 15.0 per cent recorded in November 2016,’’ it stated.

During the week the International Monetary Fund, IMF, issued a release blaming the galloping inflation on poor financial management by the Nigerian leadership.

In its policy paper on macroeconomic developments and prospects in low-income developing countries issued during the week, the IMF stated; “Domestic failure cited include delayed/poor managed policy adjustment to lower commodity prices( as in Nigeria, where foreign exchange rationing adversely affected debt service capacity of many corporates.”

Another critical handicap of the country’s leadership is lack of business confidence, according to the global multi-lateral finance organization.

This leadership deficit, according to the IMF is responsible for Nigeria’s galloping inflation. It added, “In Nigeria, efforts to support the Naira through foreign exchange rationing, have gradually crumbled. Aside from direct damage and increased security outlays, conflict situations undermine business confidence, investment and tourism”.

Unchecked, these economic woes are been felt by Nigeria’s immediate neighbours such as Benin Republic and Chad, the IMF said.