Food prices defy inflation control measures despite rate decline

DESPITE the gradual decline in inflation rate in the last four months, checks across major markets showed that prices of goods and foodstuff are still on the rise.

Nigeria’s inflation rate in the month of August 2021 dropped to 17.01 per cent from 17.38 per cent recorded in July 2021. This represents the fifth consecutive decline in the rate of inflation recorded in Nigeria. This is according to the National Bureau of Statistics ( NBS).

The latest figure is 0.37 per cent points lower than what was recorded in the previous month. Meanwhile, on a month- on- month basis, the headline index increased by 1.02 per cent in August 2021, this is 0.09 per cent higher than the rate recorded in July 2021 ( 0.93 per cent).

Food index, a closely watched index, which measures the rate of change in the prices of food items in the country, dropped to 20.3 per cent in August 2021, compared to 21.03 per cent recorded in the previous month.

According to the report, the rise in the food index was caused by increases recorded in the price of bread cereals, milk, cheese and egg, oil and fats as well as tea and cocoa.

However, the reality in the markets is different. For instance as at July 2021, 50 kg of beans worth N40, 000 while as at August 2021, it was sold at N45,000.

Also within the same period, 50kg of garri, rice and maize cost N13,000, N28,00 and N13, 500 but as at August, it rose sharply to N15,000, N32, 000 and N22,000.

Professor of Capital Market, Nasarawa State University, Prof Uche Uwaleke said there is need for the deceleration in inflation rate to continue in the wake of sustained CBN’S interventions, especially in the agric sector.

He urged the Federal Government ( FG) to tackle major inflation induced factors such as increase in pump price of fuel and electricity tariff.

“I expect the deceleration in inflation rate to continue in the wake of sustained CBN'S interventions in the Agriculture sector and especially as we enter the harvest season so long as the implementation of the major threats to inflation are delayed.

“I am referring to increases in pump price of fuel, which comes with the Petroleum Industry Act ( PIA) 2021 as well as electricity tariffs.

Professor of economics at Olabisi Onabanjo University, Ago- Iwoye, Sheriffdeen Tella, said the moderation in inflation rate is at variance with the reality on ground.

He said: “The released CPI is totally at variance with current reality. There is the need for private Sector data set collection so that we can have appropriate data for the country and for researchers.

“It should be possible for newspapers to also publish market prices of commodities though some do so. The NBS data is no longer reliable and not professional.”

The urban inflation rate increased by 17.59 per cent ( year- on- year) in August 2021 from 18.01 per cent recorded in July 2021, while the rural inflation rate increased by 16.43 per cent in August 2021 from 16.75 per cent in July 2021.

On a month- on- month basis, the urban index rose by 1.06 per cent in August 2021, up by 0.08 per cent points compared to the rate recorded in July 2021 ( 0.98 per cent), while the rural index also rose by 0.99 per cent in August 2021, up by 0.12 per cent points compared to the rate that was recorded in July 2021 ( 0.87 per cent).