The latest report by the National Bureau of Statistics (NBS) showed a rise in inflation figures translating to increasing prices of goods and services for Nigerians whose standard of living continues to diminish; BENJAMIN UMUTEME writes.
In its Consumer Price Index (CPI) for June 2021, the National Bureau of Statistics (NBS) said inflation rate increased to 18.60 percent on a year-on-year basis. This is 0.84 per cent points higher compared to the rate recorded in June 2021, which is 17.75 per cent.
It meant that the headline inflation rate increased in the month of June 2022 when compared to the same month in the previous year (i.e., June 2021).
On a month-on-month basis, the Headline inflation rate increased to 1.82 per cent in June 2022, this is 0.03 percent higher than the rate recorded in May 2022 (1.78 percent).
The percentage change in the average composite CPI for the twelve months period ending June 2022 over the average of the CPI for the previous twelve months period is 16.54 per cent, showing a 0.62 per cent increase compared to 15.93 per cent recorded in June 2021.
During the review month, food inflation was recorded highest in Kwara, accounting for 25.62 per cent, followed by Kogi 24.81 per cent and River 24.34 per cent while Jigawa reported 16.01 per cent, Sokoto reported 16.24 per cent and Kaduna had 17.75 per cent states representing the slowest rise on a year on year basis.
And this has been the case in the past couple of months as the inflation figures continue to follow an upward trajectory.
This has led to an increase in goods and services with Nigerians lamenting as they see their purchasing power disappear.
All these have been exacerbated by the raging Russia-Ukraine war which has driven inflation rates upwards globally.
Financial analysts are of the view that the huge expansion in inflation could be partly attributed to knocks on the doors of Nigerians and businesses where price of diesel increased approximately 278 per cent since January 2022 to around N850 per litre plus the adjustment in the PMS pump price above the N165 per litre.
Arresting the drift
And in a bid to tackle this drift, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria raised the Monetary Policy Rate (MPR) by 100 basis points to 14 per cent from 13 per cent that it has kept for some time.
According to the CBN Governor, Godwin Emefiele, the move by the apex bank “is part of efforts being made to tame inflation.”
Briefing newsmen after the MPC meeting on Tuesday, Emefiele said: “The MPC noted that the current upsurge in price levels remains a primary concern to monetary policy as members focused on the optimal policy approach required to address this development while protecting the fragile recovery.
“And as regards tightening policy, members were unanimous that given the aggressive increase in inflation coupled with the resultant negative consequences particularly of purchasing power of the poor as well as retarding growth, there is the need to continue to tighten.”
World Bank report
And only recently, the World Bank listed Nigeria as being among the top ten countries in the world with the worst inflation rate. This, the World Bank based on 2021 figures.
According to the report, Nigeria ranked 8th on the list with an annual inflation rate of 16.95 per cent, an unenviable list only topped by the likes of Sudan, Lebanon, and Zimbabwe.
Out of the ten countries listed by the World Bank, six of them are from Africa.
The report measured global inflation rate as the consumer price index rose to 3.42 per cent in 2021, from 1.92 per cent recorded in the previous year, hitting its highest level in nine years.
Nigerians, businesses cry out
In the past couple of years, prices of goods and services have continued on the upward drive leading tales of lamentations from Nigerians across board.
Even businesses have not been spared as sales and profit returns continue to drop.
For some, weak government policies have also aided inflation uptick and slowed down businesses.
For the managing director of Living Trust Mortgage Bank, Adekunle Adewole, the mortgage business has been dull no thanks to these factors.
According to him, with cement now selling for N4, 200 and iron rods going for as much as N420, 000, the mortgage business was at its lowest ebb.
Cement prices have risen from N1, 000 in 2014 to N3, 900 and N4, 200 in June 2022.
Adewole lamented that natural materials such as sharp sand (20 tonnes) had surged by 218 per cent from N22, 000 seven years ago to N70, 000 in June. Also, iron rods (12mm per tonne) rose from N140, 000 to N420, 000, while finishing materials like porcelain tiles (40×40) rose N3, 000 from N1, 000.
“Of course, price instability cannot be overemphasized. Sky-rocketing costs affecting cost management, customers’ projects and loan repayment.”
For Adinoyi Musa, his purchasing power has been diminishing at an alarming rate. He told this reporter that with the way things were going, he might not be able to feed properly and not talk of paying his rent.
“Sometimes when I come back from the market, I wonder whether I lost money. My wife and I have had to adjust our feeding pattern all in a bid to cut down the cost of living.
“Transportation fare has also been affected. Before, I used to spend between N800-N1, 000, now, if I leave the house with less than N1, 800, then I am in trouble. And in all these, there is no increase in salary,” he said.
Chioma Henry, a regular customer at the Karu market was alarmed when a basket of tomatoes she bought at N3,000 a fortnight ago, has shot up to N5,000.
Even Blessing Chibuzor, a school teacher in Jikwoyi, a suburb of the FCT, bought a sachet of spaghetti for N300 two weeks ago. By last Friday however, the price of the same item has shot up to between N420 and N450. The big bottle of Palm oil that she bought for N850 then now goes for N1, 100 while a four-litre can of groundnut oil has moved from N8, 500 to N9, 400 within two weeks.
Glory Odum, who deals in fashion accessories at the popular Nyanya market, a satellite town of the FCT, also expressed her displeasure with the surging prices of goods and services.
Salonist and barbers have yanked up their prices. Clothes are now very expensive. Buying new clothes now is a luxury. To do pedicures and manicures is also expensive. In my area, it used to be N500 but is now N750.
“Even prices have gone up at Barber’s Shop from N500 to N750. I mean this is just to have a haircut not dying and another artificial add-on.
She wondered what efforts the government is making to address the issue, and lamented that the government seems not bothered at all.
“I can’t wait for this government to go and let’s have a new administration and see if things will be better.”
What’s fuelling inflation?
With the sanction on Russia by the US and NATO countries, analysts had warned that it was only a matter of time before the world began to experience inflation. Russia supplies 40 per cent of gas that is used worldwide.
Chief Executive Officer (CEO) Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, noted that one of the major drivers of inflation is high energy costs.
He said the government should as a matter of urgency suspend all forms of taxes and levies on the importation of petroleum products to give a respite on the spiking energy cost.
Yusuf said for the basket of goods consumed by most households, prices have jumped by between 30-100 percent over the past one year.
“The same is true of businesses. The spiraling inflation dynamics demands an urgent policy response at the highest level of government,” he said, adding that the impact on citizens’ welfare is inestimable.
“Pressure of spiking inflation on household budgets has been excruciating and unbearable.
“Purchasing power has been massively eroded, real incomes have been depressed, and the poverty incidence has consequently worsened. The effect on SMEs is troubling,” he said.
