The Centre for the Promotion of Private Enterprise (CPPE) has pointed out that the reality and severity of the impact of the intense inflationary pressure over the past one year is at variance with the official inflation data.
Chief Executive Officer of CPPE, Dr Muda Yusuf noted the marginal acceleration of headline inflation from 15.60per cent in January to 15.70per cent in February 2022, according to the inflation report released by the National Bureau of Statistics (NBS).
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He said that the acceleration of headline inflation from 15.60per cent to 15.70per cent was a mere 0.1per cent increase while food inflation, rather curiously, decelerated marginally from 17.13per cent in January to 17.11per cent in February 2022. Also, the core inflation sub-index accelerated from 13.87per cent in January to 14.01per cent in February.
He said while the technical computation of the inflation figures by NBS is not in dispute; the reality of the spiking inflation over the past one year is at variance with the official inflation data.
He said, “For the basket of goods consumed by most households, prices have jumped by between 30 – 100per cent over the past one year. The same is true of businesses. The pressure of spiking inflation on household budgets has been excruciating and unbearable. Purchasing power has been massively eroded, real incomes have depressed, and the poverty situation has consequently worsened.
“Businesses have been similarly impacted as they have been experiencing a slump in sales, turnover and profits margins. The impact on small businesses is even more severe because of their limited capacity to absorb economic shocks.”
He stated that the spiraling inflation dynamics should be elevated to the level of an economic emergency, deserving an urgent policy response at the highest level of government; reiterating that the impact on citizens’ welfare is inestimable.
A Professor of Economics at the University of Lagos (UNILAG) Olufemi Saibu has explained that there is always a lag between economic reality and economic statistics.
The economist said that statistics that are released in February most case do not reflect what happened in that month but reflects what happened in previous month or previous year.
He added that in most cases, statistics are compared between year on year, that is, between what happened in February last year and February this year.
“So if there is no significant change between those two months, they may not really capture what happened within the year, between February last year and February this year. So at times, what the statistics reflect may not necessarily be exactly what is obtainable but it tells us the changes that have taken place over time.
“Secondly, the challenges we are facing in terms of severity of economic conditions are cumulative, they build upon each other, as such, people look at how severe it is now to expect that the way it is severe is the way inflation rate will be, which may not exactly be the case. In that case, the inflation rate on the average may be lower than the current rate because the current rate is high and by the time you sum it up over the period, those period when it was very low may reduce the impact of the current, when it is very high and that explains why people expect the inflation rate to be high but the figures come out low.”
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