CBN Governor, Sanusi Lamido Sanusi
Inflation rate in Nigeria maintained its single-digit position in the month of August as it fell slightly to 9.3 per cent year-on-year, from the 9.4 per cent recorded in July.
The latest Consumer Price Index (CPI), of the National Bureau of Statistics (NBS), made available to THISDAY Wednesday, revealed this. The CPI is the basket used to measure inflation in Nigeria.
The latest Consumer Price Index (CPI), of the National Bureau of Statistics (NBS), made available to THISDAY Wednesday, revealed this. The CPI is the basket used to measure inflation in Nigeria.
According to the NBS, the monthly change of the CPI was 1.67 per cent increase when compared with July 2011.
It also showed that the year-on-year average consumer price level as at August 2011 for urban and rural dwellers rose by 7.1 and 11.1 per cent respectively.
Governor of the Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, said last week that the Monetary Policy Committee (MPC) will among other variables, consider the movement of inflation before taking decisions on monetary tightening at the next MPC meeting, expected to hold next week.
Sanusi had explained: “For us to say whether we are going to tighten or not, we are going to look at all these variables and if you have got the Asset Management Corporation of Nigeria (AMCON) recapitalising the banks, if you have huge government expenditure and an increase in wages, these are things that can be addressed by monetary tightening. Now, we can’t address imported food prices, you can’t address imported high cost of energy, but we can address some of the issues of core inflation.
“So, the decision to tighten or not depends on whether we see a downward trend these variables. I agree that monetary tightening addresses some of non-structural elements significantly. But remember that we have francophone West African countries with inflation rate of five per cent. Ghana has inflation of less than 9 per cent, and they have dealt with those structural forces in their economy.”
The NBS report further revealed that the ‘Urban All Items’ monthly index edged higher by 1.7 per cent while the corresponding rural index increased by 1.6 percent when compared with the preceding month.
It explained: “The percentage change in the average composite CPI for the twelve-month period ending August 2011 over the average of the CPI for the previous twelve-month period was 11.6. This was slightly lower than the figure for the preceding month. The corresponding 12-month average percent change for urban and rural indices rose by 9.4 and 13.5 respectively.”
It showed that the average monthly food prices rose by 2.7 per cent in August 2011 when compared with the July 2011 figure. The level of the ‘Composite Food Index,’ according to the report, was higher than the corresponding level a year ago by 8.7 percent.
“The average annual rate of rise of the index was 11.6 percent for the twelve-month period ending August 2011.The increase in the month-on-month index was caused mainly by upward movement of the prices of most food items due to the fasting period.
However, reduction in the inflation rate does not necessarily mean fall in price provided the month-on-month percentage change is positive,” it added.
Sanusi had explained: “For us to say whether we are going to tighten or not, we are going to look at all these variables and if you have got the Asset Management Corporation of Nigeria (AMCON) recapitalising the banks, if you have huge government expenditure and an increase in wages, these are things that can be addressed by monetary tightening. Now, we can’t address imported food prices, you can’t address imported high cost of energy, but we can address some of the issues of core inflation.
“So, the decision to tighten or not depends on whether we see a downward trend these variables. I agree that monetary tightening addresses some of non-structural elements significantly. But remember that we have francophone West African countries with inflation rate of five per cent. Ghana has inflation of less than 9 per cent, and they have dealt with those structural forces in their economy.”
The NBS report further revealed that the ‘Urban All Items’ monthly index edged higher by 1.7 per cent while the corresponding rural index increased by 1.6 percent when compared with the preceding month.
It explained: “The percentage change in the average composite CPI for the twelve-month period ending August 2011 over the average of the CPI for the previous twelve-month period was 11.6. This was slightly lower than the figure for the preceding month. The corresponding 12-month average percent change for urban and rural indices rose by 9.4 and 13.5 respectively.”
It showed that the average monthly food prices rose by 2.7 per cent in August 2011 when compared with the July 2011 figure. The level of the ‘Composite Food Index,’ according to the report, was higher than the corresponding level a year ago by 8.7 percent.
“The average annual rate of rise of the index was 11.6 percent for the twelve-month period ending August 2011.The increase in the month-on-month index was caused mainly by upward movement of the prices of most food items due to the fasting period.
However, reduction in the inflation rate does not necessarily mean fall in price provided the month-on-month percentage change is positive,” it added.
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