Mixed Reactions Over Nigeria's Inflation Rate

Reactions to Nigeria's most recent inflation report, which showed a decrease in July 2024, have been mixed, with some Nigerians expressing concerns that the reported figures do not accurately reflect market realities.

According to the National Bureau of Statistics July Consumer Price Index and Inflation data released last week, the country's headline inflation dropped to 33.40 percent from 34.14 percent in June 2024. Similarly, food inflation decreased to 39.53 percent from 40.87 percent in the same period.

This marks the first time since December 2022, when inflation was at 21.34 percent, that Nigeria has experienced a decrease in inflation. The development has sparked significant discussion within the economy, especially given the series of fiscal and monetary measures recently initiated by the government.

In its most recent meeting, the Central Bank of Nigeria increased interest rates to 26.75 percent as part of efforts to curb inflation. Additionally, the government began waiving import duties on staple foods such as rice, sorghum, millet, maize, wheat, and beans to address rising food prices.

Despite these measures, prices for essential goods remain high. For instance, a 50-kilogram bag of local rice now costs between N78,000 and N85,000, while other staple items like beans, garri, and tomatoes have also seen significant price hikes.

Experts have weighed in on the disparity between the inflation figures and the realities faced by consumers. Muda Yusuf, the Executive Director of the Centre for the Promotion of Private Enterprise, clarified in an exclusive interview with DAILY POST that a decline in inflation does not mean a reduction in prices but rather a slowdown in the rate of increase.

"A decrease in inflation doesn’t imply a price reduction but rather a decrease in the rate of increase," Yusuf explained. He emphasized the need for the Nigerian government to tackle energy costs, trade costs, insecurity, and foreign exchange market volatility to truly reduce inflationary pressures.

Gbolade Idakolo, a financial analyst and CEO of SD & D Capital Management, noted that while inflation has decreased, the economic environment in Nigeria remains unstable. He called for measures that directly impact the average person to lower living expenses, citing the Central Bank's tightening of monetary measures as a significant burden on businesses.

Prof. Godwin Oyedokun of Lead City University in Ibadan highlighted the disconnect between the NBS data and consumers' real-world experiences, pointing out the challenges in accurately measuring and interpreting economic indicators amidst significant price volatility.

Okechukwu Unegbu, a former president of the Chartered Institute of Bankers of Nigeria (CIBN), also questioned the accuracy of the NBS figures, suggesting that actual core and food inflation rates in Nigeria might be higher than reported.

Overall, while the NBS data shows a positive trend, the lived experiences of Nigerians suggest that much work remains to be done to address the high cost of living.