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Tag: Inflation

  • Inflation hits 15.6%

    Inflation hits 15.6%

    The National Bureau of Statistics (NBS), yesterday said the Consumer Price Index (CPI) or in flation rose to 15.6 per cent in May from 13. 7 per cent in April.  The figure, representing a 10-year high, was 1.9 per cent points higher from April rates.

    “The increase in rates in May relative to April reflects an overall increase in general price level across the economy as all divisions which contribute to the Headline Index increased at a faster pace in May.

    “ Year on year, electricity rates as well as other energy prices continue to manifest as key drivers of the Core component of the CPI.

    “The Core sub-index increased to 15.1 per cent in May, up by 1.7 per cent points from rates recorded in the previous month. During the month, the highest increases were seen in the passenger transport by road, Liquid Fuel (kerosene), fuels and Lubricants for Personal Transport Equipment (Premium Motor Spirit) and Vehicle Spare Part groups,’’ it said.

    The report said that imported foods as well as a drawdown of inventories across the country continued to push food prices higher.

    It said that the Food Sub Index increased to 14.9 per cent in May, up by 1.7 per cent points from rates recorded in April.

    The report said that the food sub index increased as all major food groups which contributed to the food sub-index increased at a faster pace. “This is driven by higher food prices in fish, bread and cereals, and vegetables groups for the second consecutive month. In addition, the Imported Food Sub-Index increased by 18.6 per cent in May, compared to 2.2 per cent points from rates recorded in April,’’ it said.

    The spate of increase was driven primarily by both the food and the core sub-indices of the consumer price index. The Food sub-index increased by 14.9 per cent year-on-year on the back of a spike in the prices of bread and cereal, fish and vegetables.

    Reacting to the inflation figure, Analyst at Eczellon Capital Limited, Mustapha Suberu, said the key implication of the new inflation figure is the increase in the effective cost of borrowing for businesses and individuals in the economy. This, he added, will manifest in the yields of the Federal Government bonds which will trend higher so as to provide adequate inflation cover for investors.

    “Consumer real income is further pressured which would likely translate to a further decrease in aggregate demand for goods and services in the economy. This will possibly impact consumer facing companies the most in terms of reduced sales especially for products with cheaper substitutes,” he said.

    “Sadly, we expect this trend (rising inflation) to continue in the coming months as the drivers of inflation are still very imminent such as the lag effect of the recent increase in petrol, food price increase associated with the Ramadan fast and the gradual release of funds for the government’s 2016 expansionary fiscal programme”.

  • Nigeria’s inflation hits 15.6 % in May – NBS

    Nigeria’s inflation hits 15.6 % in May – NBS

    The National Bureau of Statistics (NBS), on Tuesday said the Consumer Price Index (CPI) increased to 15.6 per cent in May from 13. 7 per cent in April.

    A report released by the NBS in Abuja said that the CPI, which measures inflation, recorded a relatively strong increase for the fourth consecutive month.

    The report said that the Headline Index increased to 15.6 per cent year-on-year, which was 1.9 per cent points higher from rates recorded in April (13.7 per cent).

    “The increase in rates in May relative to April reflects an overall increase in general price level across the economy as all divisions which contribute to the Headline Index increased at a faster pace in May.

    “ Year on year, electricity rates as well as other energy prices continue to manifest as key drivers of the Core component of the CPI.

    “The Core sub-index increased to 15.1 per cent in May, up by 1.7 per cent points from rates recorded in the previous month.

    “During the month, the highest increases were seen in the passenger transport by road, Liquid Fuel (kerosene), fuels and Lubricants for Personal Transport Equipment (Premium Motor Spirit) and Vehicle Spare Part groups,’’ it said.

    The report said that imported foods as well as a drawdown of inventories across the country continued to push food prices higher.

    It said that the Food Sub Index increased to 14.9 per cent in May, up by 1.7 per cent points from rates recorded in April.

    The report said that the food sub index increased as all major food groups which contributed to the food sub-index increased at a faster pace.

    “This is driven by higher food prices in fish, bread and cereals, and vegetables groups for the second consecutive month.

    “In addition, the Imported Food Sub-Index increased by 18.6 per cent in May, compared to 2.2 per cent points from rates recorded in April,’’ it said.

  • Rise in inflation triggers rental defaults

    The Nigerian Institution of Estate Surveyors &Valuers (NIESV ), Lagos branch, has decried the state of the economy and what it called ‘geometric progression’ in expenditure by the citizenry compared to their income.

    The situation, the body said, has been  further compounded with the inflation rate hitting an all-time high of about 13 per cent.

    This, coupled with the hike in fuel price and its attendant effect on the purchasing power of people, the body said, may have led to the high rate of rental defaults in the country.

    According to its Vice Chairman,  Lagos Branch, Mr.  Orimalade Olurogba, 80 per cent of properties in his care has defaulting tenants, who, he said, met their obligations previously. He noted that some sectors, including oil and gas, hitherto known to offer job security, have been the worst hit lately.

    Olurogba, who spoke during the Institution’s Week in Lagos, regretted the oil and gas sector is affected.

    “A lot of people are being retrenched; the high end or the upper middle class people working in oil companies and who live Victoria Garden City and Lekki Phase 1 and other areas whose rentals are up to N4million and above are struggling. Some are even moving to cheaper accommodation, even as the once upon a time ‘ideal and choice tenants’ that most landlords look forward to occupying their properties are currently defaulting because of the uncertainties in the economy,” he said.

    Olurogba noted that the state of the economy is affecting the body’s legitimate streams of income and urged for urgent action by the government.

    On quackery, he revealed that the institution has established a body to regulate the practice of the agency by training middle cadre professionals on the rudiments of the profession and ethics to bring them up to  maintain professionalism, adding that  they took that line of action to protect the practice of the profession and the public from being duped.

    Also, a former secretary of the institution, Dotun Bamigbola, who corroborated Olurogba’s position, said the institution has imputed standardisation  in its practice by training the middle cadre professionals under the umbrella body of Association of Estate Agents of Nigeria in title documentation, agency transaction, amongst others.

    The Publicity Secretary, Mr. Moses Emele, in his contribution, noted that mass housing remains the only viable way to address the challenges of inadequate shelter. He encouraged both the Federal and state governments to provide an enabling environment for the private sector by facilitating easier access to land.

  • Buhari spending sleepless nights on how to make life better for Nigerians- Shehu

    Buhari spending sleepless nights on how to make life better for Nigerians- Shehu

    To check food price increases and exploitation of common people by traders, President Muhammadu Buhari has ordered for the release of 10,000 tons of grains from the national strategic grains reserves for national distribution.

    This decision was contained in a statement issued by the Senior Special Assistant on Media and Publicity, Garba Shehu.

    Buhari has also directed the Minister of Agriculture, Audu Ogbeh to ensure that all the able-bodied men and women in IDP camps be assisted to return to farming immediately.

    The directives were in reaction to calls for government measures to ease hardship associated with food inflation.

    The Presidency however asserted that the devastation of the economy was caused by the Boko Haram insurgency, corruption and the lack of planning by the past administrations and one that should not be blamed on the Change Agenda of the Muhammadu Buhari administration.

    The Presidency also rejected the insinuations that poverty and lack are products of the Change mantra.

    The statement reads: “This should be dismissed as an erroneous and misplaced opposition criticism. The President understands the pain and the cries of the citizens of this country and he is spending sleepless nights over how he can make life better for everyone.

    “Contrary to assertions by a faction of the opposition Conference of Nigerian Political Parties (CNPP), the President’s energy and focus are on changing the life of Nigerians, with a view to making it better than he met it.

    “Change is a process. Change does not happen overnight. Change can be inconvenient. Change sometimes comes with pain. Over the past year, the government has been working night and day to deliver on its promise of change to Nigerians, and the painful process is still ongoing.

    “This is work in progress. As life gradually returns to normal in much of the country and the northeast in particular, agriculture will resume and traders from neighbouring African countries will once again feel safe to do business with us, yet another boost for our economy.”

    The Presidency maintained that it is only when Nigerians appreciate where they are coming from that they will grasp the full meaning and essence of what the ongoing journey entails.

  • Can CBN tame the rising inflation?

    SIR: The Buhari-led administration appears to be doing a wonderful job fighting corruption. The last time this monster was tackled head-on in this country, was in 1984, by the same Head of State, Muhammadu Buhari.

    Then as now, the price of crude oil created the havoc. Then, as now, there were discordant views about whether or not the government should devalue the currency or not.

    Meanwhile, as the administration is focusing on the battle against corruption and on external affairs, there is no discernible policy direction of government with regards to the economy and there’s an overwhelming feeling among most informed that the economy is faltering at an alarming rate and a resignation that it might never get better than this without some sort of dramatic change.

    The government may pretend not know it but it is the reality on ground. Pure water sachet is now selling for N10 as against N5 in the North and N20 as against N10 in Lagos and places like Abuja; this is not because there are water shortages in the country, allegedly due to the cost of importing polyethylene, a raw material for making the sachet, which has shot up.

    Already, prices of consumer products and household items like mobile phones, electrical components and electronics have been inflated by over 20 percent, as such products are imported and assembled locally.

    Many economic experts and social commentators have said the current rate of rising inflation requires the CBN’s urgent attention because of its adverse effects on the economic well-being of the citizens.

    As industry observers worry on how long it would take for this inflationary trend to be halted, even a forlorn hope seems like a mirage, because there is no vibrant economic team to tackle these economic challenges and provide clarity and direction of economic policies. All we have is widening team of media foot soldiers who, for now, specializes in sustaining the sermons of melancholy inherited by the regime.

    Given that over-production and excess demand are the major causes of inflationary trends, the challenge before the CBN therefore is to grow the economy by ensuring reasonable growth for the real sector. This can be done with its monetary policy instruments, which experts say is necessary in employment generation, poverty reduction and sustainability of macro-economic growth rates and objectives of any serious government.

    Overall, the apex bank would need to reinforce its technical capacity for the analysis of monetary policy and a comprehensive toolkit for macro-economic projections in order to smoothly transit to a new framework.

    Recall that the Chairman of the US Federal Reserve Bank, equivalent to our CBN Governor, Dr. Arthur Burns, once said that ‘if a nation allowed an untenable economic situation to persist for too long, suddenly, there are no good options left’. Nigeria is slowly but surely approaching a situation where there are no good options left. Even now, the options have been reduced to few. But another delay will spell doom.

     

    • Aminu Imam,

    aminimam@gmail.com

  • January inflation rate steady at 9.6%, says NBS

    January inflation rate steady at 9.6%, says NBS

    The consumer inflation rate for last month remained steady at 9.6 per cent, data from the National Bureau of Statistics has shown.

    The December inflation figure was also at 9.6 per cent even as food inflation was steady at 10.6 percent in January compared with the previous month.

    The December inflation rate rose to 9.6 per cent compared with the 9.4 per cent inflation rate in November, the December 2015 Consumer Price Index (CPI)/ Inflation Report issued by the NBS in Abuja indicated.

    The report said the pace of increased recorded by CPI which measures inflation increase for the second consecutive month.

    “The Headline Index increased by 9.6 per cent (year-on-year), 0.2 per cent points higher from rates recorded in November. The increase in the headline index is driven in part by higher prices within key divisions which contribute to the index. In particular, imported food items within the food and non-alcoholic beverages divisions, alcoholic beverage, tobacco and kola, clothing and footwear and transportation divisions all impacted the index,’’ it said.

    According to the report, food prices recorded significant pressures in December. It said that the food sub-index increased to 10.6 per cent (year-on-year) during the month, 0.3 per cent points from rates recorded in November.

    “All major food groups, which contribute to the food sub index, increased at a faster pace during the month with the exception of the milk, cheese and eggs group.’’

    According to the NBS, the Consumer Price Index (CPI) measures the average change over time in prices of goods and services consumed by people for day-to-day living. It said 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.

    Also, 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.

  • Inflation accelerates to 9.6%, highest since 2012

    Inflation rate accelerated to a three-year high in December as food prices rose. The consumer price index increased by 9.6 per cent on an annualised basis, compared with 9.4 per cent in November, the National Bureau of Statistics said in a report published on Sunday. Food price inflation climbed to 10.6 per cent from 10.3 per cent.

    Inflation is now at its highest since December 2012 and has been above the central bank’s target of six to nine per cent every month since May 2015.

    Nigeria’s economy, which relies on oil for two-thirds of government revenue, has been battered by crude prices falling 42 per cent in the last year to below $30 a barrel. Efforts by the central bank to stem the fall of the naira by stopping banks from trading dollars are blamed by some analysts for accelerating inflation by preventing businesses from importing all the items they need to operate.

    “Imported food along with other exchange-rate-sensitive price categories recorded higher sequential rates of inflation during December, likely as a result of tighter foreign exchange supply,” Chernay Johnson, an analyst at Credit Suisse Group AG in Johannesburg, told Bloomberg.

    Inflation will be driven higher in the coming months by increased energy prices and government spending as President Muhammadu Buhari implements a record budget meant to stimulate the economy, she said.

    “The upside risk to our end-2016 CPI inflation forecast of 10.2 percent is growing,” Johnson said. All 12 analysts surveyed by Bloomberg think the central bank will keep its main interest rate at 11 percent at its next meeting on January 25 to 26.

  • ‘Inflation rate marginally lower in October’

    ‘Inflation rate marginally lower in October’

    The National Bureau of Statistics (NBS) yesterday said inflation rate in the country increased by 9.3 per cent year-on-year in October.

    It made this known via its October 2015 Consumer Price Index (CPI) that was issued in Abuja.

    The News Agency of Nigeria (NAN) reported that CPI gauges the average change over time in the prices of goods and services that are consumed by the people in their day-to-day living.

    The CPI stated that last month’s inflation rate was marginally lower from the rate recorded in September, which was 9.4 per cent.

    It, however, said the lower rate in October was as a result of lower increases in most divisions which contributed to the Headline Index, with the exceptions being transport, recreation and culture divisions.

    The report added that food prices edged lower in October.

    It said the food sub-index increased by 10.1 per cent during the month, from 10.2 per cent recorded in September.

    “The Food sub-index was weighted upon as a result of a slower increase in bread and cereals; milk, eggs and cheese.

    “It was also weighted upon as a result of slower increase in potatoes, yams and other tuber groups, the latter which has increased at a slower pace for five consecutive months,’’ it said.

    The report said both the urban and rural indices slowed (year-on-year) in October.

    It said the urban index increased by 9.4 per cent from 9.5 per cent in September, while the rural index increased by 9.2 per cent in October from 9.3 per cent in September.

    “On a month-on-month basis, both the urban and rural indices slowed.

    “The urban Index increased by 0.4 per cent in October, from 0.7 per cent in September, while the rural index increased by 0.4 per cent in October from 0.5 per cent in September,’’ the report concluded

  • Inflation hits 9.4 per cent record high in two years

    Inflation hits 9.4 per cent record high in two years

    Inflation rate climbed to the highest in more than two years last month as food prices surged, exceeding the Central Bank of Nigeria’s (CBN’s) target for a fourth month.

    Inflation accelerated to 9.4 per cent from 9.3 per cent in August, the National Bureau of Statistics (NBS) said yesterday. The median estimate of 17 economists surveyed by Bloomberg was 9.5 per cent. Prices rose by 0.6 percent in the month.

    A slump in crude prices by more than 40 per cent in the past year has put pressure on the naira, pushing up consumer prices, and cutting government revenue. CBN Governor Godwin Emefiele imposed foreign currency controls this year to stabilise the naira, restricting imports and adding to price pressures.

    The CBN has kept its policy rate unchanged at 13 percent for five consecutive meetings even as inflation exceeded the bank’s six per cent to nine per cent target.

    Emefiele has so far resisted calls to ease the foreign exchange controls and devalue the naira despite criticism by investors, businesses and fellow members of the Monetary Policy Committee. The naira has averaged 198.99 per dollar since the restrictions were imposed in February.

    The core inflation rate, which excludes agricultural products, fell to 8.9 per cent last month from 9 per cent in August, the statistics office said. Food inflation accelerated to 10.2 per cent from 10.1 per cent.

    The inflation figure released by the NBS followed an earlier survey by The Nation. Most analysts said they expected inflation rate to increase successively over a two-month period, a trend that could worsen the negative returns on Nigerian equities.

    With basic equities’ return in negative, inflation-adjustment would almost double investors’ losses, a trend that could further dampen investors’ appetite and orchestrate flow of funds to inflation-hedged instruments and other negative but less volatile securities.

    Nigerian equities declined by 1.30 per cent yesterday, pushing the average-year-to-date return to -14.40 per cent. With current inflation rate of 9.4 per cent, inflation-adjusted average return at the stock market opens today at -23.8 per cent. Prediction of further rise in inflation by most pundits implied that the negative equities’ return may worsen. Nigerian equities’ average return is measured by the All Share Index (ASI) of the Nigerian Stock Exchange (NSE).

    Financial Derivatives Company (FDC) noted that with the rise in inflation rate to 9.4 per cent last month, inflation has increased in eight out of the nine months so far in 2015, adding that the current inflationary trends seem to be more structural despite the CBN’s statement in its July communiqué that the inflationary pressures were transient.

    FSDH Merchant Bank said it expected the October 2015 inflation rate to increase further.

    “Looking ahead, the inflation rate for the month of October 2015 is expected to be higher than the September 2015 figure,” FSDH Merchant Bank stated.

    Analysts at FDC said the primary catalysts of price inflation in Nigeria are cost-push factors, which are being intensified by the restriction of dollars for some critical inputs.

  • Rising inflation threatens investors’returns

    Analysts have predicted an increase in inflation rate over a two-month period, a trend that can worsen the negative returns on equities.

    Leading financial and investment firms said inflation rate may have risen to 9.4 per cent last month, with many other analysts seeing further push in inflation this month.

    The National Bureau of Statistics (NBS) is scheduled to release the inflation rate for last month tomorrow. Inflation had risen from 9.2 per cent in July to 9.3 per cent in August.

    With basic equities’ return in negative, inflation-adjustment would almost double investors’ losses, a trend that could further dampen investors’ appetite and orchestrate flow of funds to inflation-hedged instruments and other negative but less volatile securities.

    Nigerian equities had opened Monday with a negative average year-to-date return of -12.77 per cent. With  inflation rate of 9.3 per cent, inflation-adjusted average return at the stock market stood at 22.07 per cent. Prediction of further rise in inflation by most pundits implied that the negative equities’ return may worsen. Nigerian equities’ average return is measured by the All Share Index (ASI) of the Nigerian Stock Exchange (NSE).

    With inflation rate expected at 9.4 per cent for September, inflation-adjusted return may rise to about 22.1 per cent.

    FSDH Merchant Bank, which had correctly predicted inflation rise for August, said it expected last month’s year-on-year inflation rate to inch up marginally to 9.4 per cent, because of a marginal increase in the prices of some food items.

    Financial Derivatives Company (FDC) said it was projecting an increase in Nigeria’s headline inflation to 9.4 per cent in September from 9.3 per cent in August.

    “If this happens, inflation would have increased in eight out of the nine months so far this year,” FDC stated, noting that inflationary trends seem to be more structural despite Central Bank of Nigeria’s (CBN’s) statement in its July communiqué that the inflationary pressures were transient.

    “With the cabinet set to take their portfolios in a few days, the economy will be shifting from safe mode to active. We are, therefore expecting that inflationary pressures that have been relatively benign will become more potent,” FDC stated

    Access Bank has also predicted a 9.4 per cent inflation rate for September. The economic intelligence unit of the bank said it adopted an autoregressive analysis of past prices while recognising all the assumptions used by the NBS in its computation of monthly Composite Consumer Price Index (CCPI) to arrive at the inflation forecast.

    “Our September forecast of 9.4 per cent stems largely from anticipated uptick in the prices in both food and non-food items in the Consumer Price Index (CPI) basket. We expect prices of items, such as meat, fruits and vegetables to weight upon the index on high demands during the Eid-el-Kabir celebrations,” Access Bank stated.

     

    FSDH Merchant Bank said it expected the October 2015 inflation rate to increase further.

    “Our model indicates that the price movements in the consumer goods and services in September 2015 would increase the CCPI to 176.56 points, representing a month-on-month increase of 0.66 per cent. We estimate that the increase in the CCPI in September will produce an inflation rate year-on-year of 9.4 per cent. Looking ahead, the inflation rate for the month of October 2015 is expected to be higher than the September 2015 figure,” FSDH Merchant Bank stated.

    Analysts at FDC said the primary catalysts of price inflation in Nigeria are cost-push factors, which are being intensified by the restriction of dollars for some critical inputs.

    Analysts however noted that the recent release of the President Muhammadu Buhari’s ministerial list may help to ease investor uncertainty pointing out that though the new cabinet did not stir up much enthusiasm, the stable environment created by revealing the President’s team will help foster positive investor sentiment.

    “There has still been rising inflation despite shrinking money supply. Though the reduction in Cash Reserve Requirement (CRR) is expected to lead to increased money supply, there will not be a significant rise in money supply in the near future and its effect will be noticed in the coming months. We expect inflation to keep on rising till the end of the year due to higher spending during Christmas celebrations,” FDC concluded.