NIGERIAN INFLATION 18.55% IN DECEMBER? NOT QUITE


The Nigerian Bureau of statistics released December 2016 composite price index last week and ended up putting the months inflation rate at 18.55%. That is year on year shift in the All items index.

However, in the All items index for the same month the value was 213.6. When compared to the 180.15 stated for December 2015, the year on year increase comes to 18.57% and not the stated 18.55%.

Interestingly, studying the November figure alongside its 2015 figure, one discovers similar discrepancy but this time, an over statement. November 2016 All items index was 211.3 compared to 178.37 for November 2015, the shift comes to 18.46% and not the 18.48 officially stated as inflation rate for November.

December being a festive month in Nigeria, month on month increase in composite index is the norm and not the exception but what was obvious in 2016 was the fact that December's price increase crossed 2011 increase.

Since the index was introduced in November 2009, top increases in December month on month occurred in 2009 (up 2.15%) followed by 2010 with 1.29%.

This downward trend in December index increase continued to 2012 when only 0.75% rise on November was recorded after 2011's 1.06%.

Since then, the shift upwards had been gradual hitting 1% increase in December 2015 after 0.83% and 0.78% in December 2014 and December 2013 respectively.

Now, according to the NBS figures for December 2016, .month on month rose by 1.09%. Will the highs of 2010 and 2009 be next come December 2017?

Possible especially if crude oil price at the international market fails to deliver on the promise of good enough and sustained recovery in the light of consensus to control production.

If not, recent efforts by the government to boost national demand could lead to higher prices if production does not rise along and notably, if foreign exchange supply continues to be very short of demand.

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