Economists fault NBS inflation figures amid astronomical rise in cost of living

ECONOMISTS have faulted the National Bureau of Statistics (NBS) June inflation report which put the figure at 22.79 per cent, citing concerns of measurement methodologies. 

The economists faulted baskets of measurements by the national statistics office, insisting that the official quoted figure did not represent the current economic realities.

“The officially qouted number is below most of the forecast of both the local and international numbers. Many experts had projected a higher inflationary number because of the two key policies of the current administration on foreign exchange unification and fuel subsidy removal. These are natural triggers to inflation,” an economist, Paul Alaje, said in reaction to the NBS June inflation numbers.

“It is possible that some of the items that NBS has in the inflation baskets are still dealing with old stocks. Food inflation increased but core inflation increased marginally,” Alaje said.

Agreeing, a professor of Finance and Capital Market, Uche Uwaleke, said those two key policies would, indeed, automatically spike inflation figures.

“Inflation came in lower than expected, although the capital market has been doing well. I think it is time the National Bureau of Statistics changed its methodology. There is a problem with the methodology, I dare say,” Uwaleke said.

According to the professor, “If you say inflation has increased by 22.79 per cent year-on-year, all you are saying is that the average commodity prices have gone up by that percentage. That is grossly understated.

“The NBS polls data covered 10,000 informants across the country, focusing on 740 commodities. However, what is important is that the methodology they are using is the national living survey of 2009, which is obsolete. It is time the methodology was updated to reflect present realities.”

Meanwhile, survey checks on few commodities frequently consumed showed more than a 50 per cent rise.

For instance, in most markets in Abuja, the price of a frequently consumed mudu of gari has risen from N300 to N600 within a space of one year. A six-piece bunch of plantain that sold for N600 at this time last year now sells for N1,400. A 75-litre bottle of palm oil, which sold N800 at this time last year also now sells for N1,300.

However, the NBS, clarifying its latest inflation figures, explained that numbers may not fully capture the impact of the fuel subsidy removal and the unification of the exchange rate.

The statistics office explained that the data collection for computing the rate for the reference month typically stopped around the middle of the month, meaning that the June numbers only reflected approximately two weeks of the policy impact on consumer prices.






     

     

    “The full effect of the policy, as relates to prices, can, therefore, not be reflected in June only, but also in subsequent months, based on actual prices collected in market outlets across the country.

    “As such, the effect of fuel subsidy removal and the unification of the exchange rate is yet to fully impact the inflation rate,” the NBS stated.

    The ICIR had reported how the International Monetary Fund (IMF) pointed out that the NBS had not been using the right methodology in measuring the CPI.

    In a report titled, ‘Nigeria: 2022 Article IV Consultation’, the IMF said the NBS was using the 2003/2004 National Consumer Expenditure Survey (NCES) to measure the CPI or the inflation rate, instead of the 2018 National Household Livings Standards, which would have measured the rate appropriately.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here


    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement

    Recent

    - Advertisement