CONSUMER PRICE INDEX STILL RISING

Inflation rate in Nigeria, as measured by the consumer price index is still climbing without a break.
According to the figures for April released by the National Bureau of statistics earlier this week, year on year, CPI rose by 13.72% in April.
In January, it had increased by 9.62% before going double digit in February at 11.38% increase.
In March the year on year increase was 12.77% and with the recent deregulation of petroleum products  marketing, it may in fact rise higher in May and beyond.
However, it is yet to hit the highest growth since 2009 which was 15.65% in February 2010.
Indeed, CPI growth trend in 2010 remains the top mark since 2009 but the April 2016 growth is a three year high.
In fact, in the months ahead, repeat of 2010 consistently high inflation rate may be on the cards.
For one, the recent deregulation of the petroleum products market will for starters lead to higher prices all round since it will impact on transportation and power generation.
For another, the pending labour demand for new minimum wage will have to be resolved soon enough with new benchmarks for take home pay that will give more teeth to cost push inflation.
Add to that the fact that foreign exchange earnings remain down with the resultant wise decision to temporarily ration the little trickling in affecting both cost of importation and availability of some consumer goods.
Finally change in weather and seasons is beginning to tell on food products supply leading to higher prices when available.
But then, of itself, CPI fast growth may not be a bad thing if it helps to stimulate higher value added which in turn leads to real economic growth and ultimately ever desired single digit inflation rate as worst case scenario.

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