Nigeria’s inflation rate drops again, but cost of living has skyrocketed
The number is decreasing but living is becoming more expensive.
This is according to information released on Monday, August 28, 2017, by the National Bureau of Statistics (NBS).
According to the report, the Consumer Price Index (CPI) has been on the downward trend since January 2017 mainly due to base effect from high inflation rate in corresponding months in 2016.
The NBS noted however that food inflation in the country hit an all-time high of 20.28%, which is a 0.37% increase from 19.91% recorded in June 2017. This is the highest level since the beginning of the new inflation metric in 2009.
Omotola Abimbola of Afrinvest Limited said about the situation: “…the inflation rate is down for seven consecutive months to 16.05%. But the less favourable news is that the pace of decline in headline inflation is underwhelming compared to market expectation.”
Food index raised within the period due to increases in prices of bread and cereals, meat, fish, oils and fats. Prices of other consumables such as coffee, tea and cocoa, potatoes yam and other tubers and vegetables also moved up.
Some Nigerians noted that the reality is different from the figures being posited by the inflation estimation.
Core inflation, which measures changes in prices of all utilities less food index, recorded an increase of one percent on a month-on-month basis, and 12.20% for July 2017.
Putting these together show the cost of living in Nigeria keeps rising.
Abimbola stated that: “the increase in food inflation is offsetting any gain that may be achieved in the decline.” Thus, hard times about living in the country is still visible irrespective of the observed decline in the general price level.
Nigeria's Minister of Agriculture and Rural Development, Dr Audu Ogbeh confirmed the classical case of higher cost of living in the country inspite of the decline in the inflation figure.
“One of the things we found out is that the cost of transportation is becoming extremely high especially because most of our transportation is by road and diesel prices have gone up and trucks are finding it difficult to move from place to place at old prices.”
The Urban and Rural index also confirmed the assertion of living cost moving up rather than the downward trend reported in the figure. Urban and Rural inflation rates rose by 16.04 percent and 16.08 percent respectively in July 2017.
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