The Organised Private Sector has said that the consecutive monthly drop in the rate of inflation in Nigeria contradicts the current economic realities across the country.
On Monday the National Bureau of Statistics in its Consumer Price Index report stated that “In August 2024, the headline inflation rate further eased to 32.15 per cent relative to the July 2024 headline inflation rate of 33.40 per cent.
“Looking at the movement, the August 2024 headline inflation rate showed a decrease of 1.25 percentage points when compared to the July 2024 headline inflation rate.”
The NBS said Nigeria’s inflation rate dropped in July and witnessed another decline in August this year, a development which the OPS described as odd considering the high cost of commodities nationwide, and the hike in petrol prices.
The President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, Dele Oye, said the report by the bureau claiming a decline in Nigeria’s headline inflation rate to 32.15 per cent in August 2024 was highly questionable and does not reflect the economic realities experienced by businesses and consumers across the country in the different sectors.
He said, “As the umbrella body representing the Nigerian private sector of all the chambers of commerce, NACCIMA finds the NBS figures to be grossly at odds with the escalating cost of living and doing business that our members and the general public are grappling with daily.
“Contrary to the NBS claims, the prices of goods and services have not only doubled but in many cases tripled, driven primarily by the astronomical increase in the cost of petroleum products, a key input for transportation, logistics, and production across various industries.
“The Nigeria National Petroleum Company Limited’s admission that it will be selling petrol lifted from the Dangote refinery at over N1,000 per liter in the far north is a clear testament to the severe supply shortages and skyrocketing fuel prices in the market.”
According to him, the skyrocketing fuel prices have led to a domino effect, with transport fares, as well as the prices of food, manufactured goods, and other commodities, spiraling out of control.
He added, “If we relate this to the report where petrol was scarce and most people had to buy fuel from non-conventional sources (black market), over and above NNPC current increased official prices, the effect on August inflation ought to be higher than as currently projected by the NBS.
“Moreover, the Central Bank of Nigeria’s sustained monetary tightening measures, poor management of the naira, including hikes in the Monetary Policy Rate, have failed to curb the inflationary pressures facing the economy.
“The fact that inflation has continued to decline for two consecutive months, as claimed by the NBS, further calls into question the credibility and accuracy of their data collection and reporting methods.”
The NACCIMA boss asserted that the association believes that the NBS figures do not reflect the harsh economic realities on the ground and urges the agency to revisit its data gathering and analysis processes to provide a more reliable and representative assessment of the country’s true inflation situation.
He said, “As the voice of the Nigerian private sector, we call on the government to urgently address the underlying structural and supply-side issues driving the soaring inflation, rather than relying on questionable statistics that do not align with the lived experiences of businesses and citizens.
“Only through a comprehensive, evidence-based approach to tackling inflation can we restore confidence in the economy and create an enabling environment for businesses to thrive.”
On his part, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said the reported decrease in inflation rates was indeed the direct opposite of the realities in the economy.
He said, “Prices of goods and commodities keep climbing up and another big push of inflation this time again is the incidental increase in petrol pump price. One begins to wonder where this reported decrease in the inflation rate is coming from.
“As predicted by the World Bank, interest rate hikes will not and have not controlled inflation in Nigeria. Also, the aggressive interest rate squeeze will further depress the economy.”
But the President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said the inflation rate figures were within expectation as PMS rates had only skyrocketed in September.
“A small decline is beginning to show because we are almost reaching the peak of inflation in Nigeria. We are slowly coming down,” he said.
The LCCI president noted that “The price range (of PMS) we are seeing now from N900 to N1,000 was not predominant in August.”
Idahosa stated that it was difficult to expect that the decline of inflation that started in August will continue for the second half of 2024, given an analysis of the fundamental drivers of Nigeria’s inflation, including petroleum, exchange rate, and food among others.
“It is difficult to expect that the decline of inflation that started in August will happen for the second half of this year. But we have to look at the fundamental drivers of inflation.
“One is oil, two is the exchange rate, and three is food, availability, and driving. Out of those three variables, the exchange rate has moved a little bit. All goods in Nigeria were already being tried in that range of N2,000, N3,000, etc,” he stated.