The Chief Executive Officer (CEO) of CFG Advisory, Tilewa Adebajo, on Tuesday, provided reasons why the May inflation data released by the National Bureau of Statistics (NBS) is highly suspicious and distorted.
The economic advisory firm argued that the delayed release of the gross domestic product (GDP) by the statistics office questions the exactness of the inflation data, since it wasn’t benchmarked against the actual current growth of the country’s economy.
“Lots of people have their purchasing power eroded. There’s a disconnect between what the NBS says and what the markets say. If you take a look at food prices in Ketu market, for instance, are they stabilising? If the NBS is not careful, the inflation numbers could go the way of unemployment figures it released recently,” Adebajo, who heads the Advisory firm, said in reaction to the May data released by the statistics office on Monday.
“The NBS is causing a bit of confusion without proper benchmarking. One of the things I had to say is that we hadn’t seen the first quarter GDP report. So, if you’re going to be going to compare the rebased inflation numbers, what are you comparing them against? Is it against the previous GDP numbers, which obviously would be distorted,” he added.
He further questioned the delay in releasing the GDP, adding that,” GDP figures as a key component that helps investors make investment decisions.
“We’re talking about rebased GDP, and where’s the figure? We’re already in June, and we don’t know how the economy is growing in Nigeria, according to the NBS. We all have to depend on our analysis and research of the market’s official data. This is confusing,” he stressed.
He added that Nigerians could be forced to produce their numbers if the statistics office produces numbers without explaining how the Nigerian economy is growing.
The ICIR reports that despite rebasing of the inflation figures, the statistics office is yet to unveil the GDP figures for the year already cut in half, which the Advisory firm says test the authenticity of released inflation numbers.
“We’re currently in June, and we don’t know how the GDP is growing when the inflation figures should be benchmarked against the actual growth of the economy,” he said.
GDP stands for gross domestic product. It’s a widely used indicator of a country’s economic performance, representing the total value of goods and services produced within its borders over a specific period of time, usually a year.
It measures household spending on goods and services, spending but businesses on capital goods such as equipment and buildings, as well as the government’s spending on goods and services.
It also includes the total values of exports minus imports.
Recall, the statistics office on Monday, June 16, said Nigeria’s headline inflation dropped to 22.97 per cent in May when compared to 23.71 per cent in April.
The data marks the second consecutive month of decline in the inflation rate since the NBS rebased its consumer price index.
The NBS data also shows moderation in food inflation to 21.14 per cent in May from 21.26 per cent in April.
“The significant decline in the annual food inflation figure is technically due to a change in the base year,” the statistics office explained.
The advisory firm said it’s a contradiction if the inflation figure is moderated because of rebasing, while the NBS remains mute on GDP figures, which show how the economy grows in a specific period.
“It is important going forward that the NBS brings forward its GDP numbers for the first and second quarters. If they’re going to rebase the GDP.
“What we should be doing now is to look at the monetary policy committee meeting and see whether the inflation decline is enough to cut interest rates. That’s how we determine the inflation numbers by the day,” Adebajo said.
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.