Economist blames high interest rates, cost of production, naira depreciation
The National Bureau of Statistics (NBS) yesterday said that January inflation rate rose to 18. 72 per cent, indicating a year-on-year rise pattern since 2016.
The details of the NBS Consumer Price Index (CPI) for January made available to The Guardian yesterday indicated that the inflation rate is higher than that of December 2016 by 0.17 per cent at 18.55 per cent.
NBS added that communication and restaurants and hotels again recorded the slowest pace of growth in January, growing at 5.1 percent and 8.4 percent (year-on-year) respectively.
According to the data, faster headline inflation, were noticed on food items such as bread and cereals, meat, fish.
Others are oils and fats, potatoes, yams and other tubers, wine and spirits, vehicle spare parts and fuels and lubricants for personal transport equipment, passenger transport by road were increased.
On a month-on-month basis, the data showed that headline inflation was driven by passenger transport by air, fuels and lubricants for personal transport equipment, liquid fuels, cooking gas, oils and fats, fruits, milk, cheese and eggs, fish, meat and bread and cereals.
Also, the NBS transport fare watch for January 2017 covering road, water, transportation, indicated that states with highest bus journey within city in January 2017 were Abuja, which charged up to N4, 960, followed by Adamawa, which charged N3, 500.45 and Lagos, which charged as much as N2, 207.14.
President of the Nigerian Society of Economists (NSE), Prof Ben Aigbokan, said the situation requires strong government approach.
Aigbokan said that government has to listen to the demands of the Manufacturers Association of Nigeria (MAN) over the need to reduce interest rates, maintaining that rates and high cost of production are two key issues driving inflation high.
The NSE chief said government also needs to increase the level of domestic production and look into further depreciation of the naira against the dollar. “It is having a negative effect on the economy and contributes to rising cost of imports.”