The Nigeria Employers’ Consultative Association (NECA) has expressed worry over the rising trend of the inflation rate in the country.
According to the latest report of the National Bureau of Statistics (NBS), it further rose from 13.71 percent in September, 2020 to 14.23 percent in October.
According to the latest figure from the National Bureau of Statistics (NBS), the new inflation rate is 0.52 percent points higher than the rate recorded the previous month.
The figure rose by 1.54 percent between September and October, indicating a 0.06 percent rate higher than the rate of rise between September and August (1.48 percent).
In the report, the composite food index rose by 17.38 percent in October 2020 compared to 16.66 percent in September 2020.
This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam, and other tubers, meat, fish, fruits, vegetables, alcoholic and food beverages, and oils and Fats.
“Core inflation, which excludes the prices of volatile agricultural produce stood at 11.14 percent in October 2020, up by 0.56 percent when compared to 10.58 percent recorded in September 2020.
“The highest increases were recorded in prices of passenger transport by air, hospital and medical services, passenger transport by road, pharmaceutical products, motor cars, vehicle spare parts, maintenance and repair of personal transport equipment, hairdressing salons and personal grooming establishments, miscellaneous services relating to the dwelling, paramedical services, and shoes and other footwear,”the report concluded.
NECA’s Director-General, Dr Timothy Olawale, raised concerns over the trend in a statement on Monday.
Olawale said that the rise suggested that the policy options provided by the Central Bank of Nigeria (CBN) in taming the gory head of inflation needed critical review.
“It is instructive to note that the persistent increase in food prices, caused by border closures, restrictions in FX market and insecurity predominantly in the Northern states has further heightened the situation.
“The inflationary situation is further compounded by the recent #EndSARS protest, which limited movement of persons and goods or services across most cities and the rising cost of transportation.
“Since the deregulation of petrol prices, the country has witnessed petrol increase by almost 30 percent in the last four months, which suggests a continuous increase in transport cost.
“Sadly, Nigerians are now being battered on two fronts; high transport cost and high inflation,” he said.
The DG commended the various intervention programmes of CBN during the COVID-19 pandemic.
He, however, urged the apex bank to complement its efforts by synergising its policies alongside the fiscal authorities in bringing needed growth and development into the economy.
“We urge, as a matter of urgency, that concerted efforts should be made across-board to create an environment that will not only attract foreign direct investment,but that will also enable current investors to remain sustainable as a way out of the challenges of a mono-foreign exchange economy, ” he said.
Speaking on the October Consumer Price Index which was released yesterday by the National Bureau of Statistics (NBS), the senior economist and head of research and strategy, Greenwich Merchant Bank, Ayodeji Ebo in phone conversation with National Economy said Inflation tracks the average prices of several goods and services, hence, “I agree with the inflation rates published by the NBS.”
“There are items that have recorded over 40 percent price increase. The food, petrol and transportation data published by the NBS further buttresses the international analysts position that the inflation rate in Nigeria is close to 40per cent.
“The high inflation rate signifies more hardship for Nigerians. The purchasing power of the average Nigerian will be further constrained due to higher cost of living. Investors will be on the search for higher returns in the equities and dollar denominated assets to hedge against the high inflation rate. With the increase in the price of PMS, inflation will be under more pressure this month.”
Also speaking with the National Economy on the continuous rise in inflation rate, The former director general, Abuja Chamber of Commerce and Industry, Dr. Chijioke Ekechukwu stressed that “there are various factors affecting the prices of goods and services. Firstly, the effect of COVID- 19 lockdown is only having its ripple effect impact in the supply chain. Food scarcity is gradually impacting supply negatively and affecting prices.
“The seasonal stockpile of goods for the yuletide has already started and so, demand has increased without corresponding increase in supply. The high exchange rate of naira to other currencies continues to be a bane in the prices of goods.”
According to Ekechukwu, the EndSARS protest also created both panic and scarcity of goods arising from the temporary lockdown and curfew imposed by various states.”