The annual rate of the general rise in prices of goods and services in Nigeria fell for the second month in March, showing the positive impact of central bank intervention in the foreign exchange market to meet demand for dollars, the National Bureau of Statistics NBS data released in Abuja has shown.
Inflation declined to 17.26 percent in March, the National Bureau of Statistics (NBS) said in a report, down from 17.78 percent in February, which was the first drop in 15 months. “It is also indicative of early effects of a strengthened Naira in the foreign exchange rate market,” it said. The central bank has sold over $4 billion on the forward currency market since February to improve dollar liquidity and narrow the spread between the official and the black market exchange rates.
According NBS data “the Consumer Price Index (CPI) which measures inflation increased by 17.26 per cent (year- on-year) albeit at a slower pace in March 2017, 0.52 per cent lower from the rate recorded in February 17.78 per cent. This is the second consecutive month of a decline in the headline CPI on a year on year basis, representing the effects of stabilising prices in already high food and non-food prices as well as favourable base effects over 2016 prices. It is also indicative of early effects of a strengthened Naira in the foreign exchange rate market.”
NBS further said “Price increases were recorded in all COICOP divisions that yield the headline index. However, the major divisions responsible for accelerating the pace of the increase in the headline index were housing, water, electricity, gas and other fuel, education, food and alcholoic beverages, clothing and foot-ware and transportation services.
“On a month-on-month basis, the headline index increased by 1.72 per cent in March 2017, 0.23 percent higher from the rate recorded in February. The food index increased by 18.44 per cent (year-on-year) in March, slightly down 0.09 per cent from rate recorded in February 18.53 per cent driven by increases in the prices of bread, cereals, meat, fish, potatoes, yams and other tubers and wine, while the slowest increase in food prices year on year were recorded by soft drinks, fruits, coffee, tea and cocoa. It should be noted that the headline index is made up of the core index and farm produce items. As processed foods are included in both the core and food sub-indices; this implies that these sub-indices are not mutually- exclusive.
“Price movements recorded by All Items less farm produce or Core sub-index rose by 15.40 percent (yearon-year) in March, down by 0.60 percent points from rate recorded in February (16.00) percent. During the month, the highest increases were seen in Miscellaneous services relating to the dwelling, electricity, solid fuels, clothing materials and other articles of clothing, Liquid fuel, Spirits as well asFuels and lubricants for personal transport equipment. The Urban index rose by 18.27 percent (year-on-year) in March from 18.57 percent recorded in February, and the Rural index increased by 16.47 percent in March from 16.98 percent in February.
“On month-on-month basis, the urban index rose by 1.76 percent in March from 1.52 percent recorded in February, while the rural index rose by 1.69 percent in March from 1.47 percent in February.
The corresponding twelve-month year-on-year average percentage change for the urban index increased from 18.42 percent in February to 18.79 percent in March, while the corresponding rural index also increased from 15.70 percent in February to 16.05 percent in March.
The Composite Food Index rose by 18.44 percent in March 2017. The rise in the index was caused by increases in prices of Potatoes, yam and other tubers, Bread and cereals, Meat, Milk, cheese and eggs.
“On a month-on-month basis, the Food sub-index increased by 2.21 percent in March, up by 0.22 percent points from 1.99 percent recorded in February. The average annual rate of change of the Food sub-index for the twelve-month period ending in March 2017 over the previous twelve-month average was 16.60 percent, 0.47 percent points from the average annual rate of change recorded in February (16.13 percent).
The ”All Items Less Farm Produce” or Core sub-index, which excludes the prices of volatile agricultural produce eased by 15.4 percent during the month, 0.60 percent points from 16.00 percent recorded in March as all key divisions which contributes to the index increased. On a month-on-month basis, the Core sub-index increased by 1.32 percent in March, 0.22 percent points higher from 1.10 percent recorded in February. The highest increases were recorded in Miscellaneous services relating to the dwelling, electricity, books and stationaries, solid fuels, clothing materials and other articles of clothing, Liquid fuel, Spirits and Fuels and lubricants for personal transport equipment. The average 12-month annual rate of rise of the index was recorded at 16.68 percent for the twelve-month period ending in March 2017, 0.24 percent points higher from the twelve-month rate of change recorded in February.”
