Following the National Bureau of Statistics (NBS) announcement of 11.08 per cent inflation rate for July 2019, analysts have expressed that Nigerians in some states might not feel the impact, stating that prices of goods and services will remain high in some major cities across the country.
Investigation carried out revealed that the 11.08 per cent inflation rate is the lowest inflation in 42 months with Nigeria last recorded inflation rate lower than 11.08 per cent in January 2016 when it stood at 9.62 per cent, while it hit a high of 18.55per cent in December of the same year.
However, following the drop in July, it means inflation has dropped for five months in 2019. It dropped in January, February, March, June and July.
Analysts have said the drop in inflation rate means a slow rise in the prices of goods, stressing that the drop does not necessarily mean market prices of goods have dropped but price items only witnessed a slow rise.
An economist, Dr Boniface Chizea, Nigerians always questioned the integrity of NBS on its inflation rate, stressing that inflation rate report is a true reflection of goods and services.
Chizea, who is the Chief Executive Officer, BIC Consultancy Services, said, “The way most Nigerians talked about inflation rate makes you feel they are trying to question the integrity of NBS.
“Most people will see things from this nature on where we stand but the NBs see it holistically by carrying out research across the country.
“They have the basket of goods and services which they use in circulation CPI.
“Let’s look at food for instance, if you go to the narrative after they’ve announced it in some items like food and so on, it’s like the thing is not coming down but in some areas where you and I cannot immediately see, its coming down.
“We might not feel it the way we expected it since we find out that the price are not going down. It is a natural reaction but then let’s give some credibility to that body.
“Mind you, we are not yet at the wood 11per cent even CBN has a target of six to nine per cent inflation single digit we are still at 11.08 per cent.”
He explained that the apex bank single digit inflation rate target in 2019 is not realistic.
“I don’t see CBN achieving a single digit this year as the country is still feeling the impact of recession that happened years back.”
Speaking further on Nigerians feeling the depreciation in inflation rate, he said, “For Nigeria to feel the impact, we have to be patient because the system is crawling.”
Also reacting, an economist consultant with Economic Community of West African States (ECOWAS) Professor Ken Ife said, there are certain parameters to watch when inflation rate is dropping and people are not feeling the impact.
“The major problem in we have Nigeria is food because there is crisis in our food chain. In the North East, we have terrorism displeasing over 3million people.
“In the whole of North East, many farmers are no longer farming or growing and grains they are in the IDP camp still fenced by other people.
“About five counties depend on Nigeria for food. They bring cattle and carry food.”
According to him, the CBN has helped to reduce inflation rate by introducing the series of borrowers schemes. If not, we would have been buying Rice worth $2 billion in import.
“So the current situation is a moving target and there’s no other plan so far to revalue the naira to make our food in export more expensive but there are presidential directives on 10 value chain recently being taking seriously.
“Hopefully before the end of this year, food basket index will drop from13.39 per cent to 11pper cent then inflation will hits single digits.
“All we need to do is to settle people back to farm.”
Inflation grew the slowest in over three years, the 11.08per cent inflation rate still shows several goods recorded price increase in the month.
As rightly noted by the NBS, prices of oils and fats, meat, bread and cereals, potatoes, yam and other tubers and fish all triggered the double-digit inflation posted in July.
In the economy, key economic agents respond differently to movement in an important indicator like inflation. Specifically, a slow rise in inflation can largely improve investors’ confidence due to the growth prospect it suggests. To individuals, this means an improvement in the purchasing power of the consumers to buy goods and services. The ability to buy more with the same income.