Experts disagree with NBS over July inflation figures



Financial experts have disagreed with the National Bureau of Statistics over the July inflation figures it released on Tuesday.

The NBS had reported that the headline inflation rate for the month of July 2023 increased to 24.08 percent compared to 22.79 percent recorded in June 2022.

But a cross section of Nigerians said the figures from the NBS did not in any way reflect what is happening in reality.

The latest report by the NBS, which was the July inflation figures, showed a seven-month consecutive rise in the nation’s inflation rate, defying efforts by the Central Bank of Nigeria to keep it down through various monetary policy measures.

Reacting to the NBS report, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, noted that though the NBS has its own methodology for arriving at its figures, he insisted that the figures released do not reflect the reality of experience of the ordinary people.

“The ordinary people will be looking at the prices they pay for goods and services on a daily basis, they look at food, they look at transportation, they look at energy and pharmaceuticals and if you look at the way the prices of these things have jumped, it is much more than what NBS is reporting,” Yusuf noted.

He said the NBS methodology doesn’t reflect how people feel about prices of goods and services in the marketplace, insisting that he expected that inflation will continue to go up unless the government responds in the right way.

“I heard the Managing Director of the Nigerian National Petroleum Company Limited (NNPCL) assuring that despite the rise in forex, there would be no increase in fuel price. At least that one can help to keep the rate down, but if not, we are in for further rise and that will worsen the already harsh economic situation,” he warned.

He said as regards the forex issue, “there is need for us to carry out research to determine how deep the parallel market is to enable us to know the kind of weight we can attach to it, because what makes headlines is the rate at the parallel market; nobody talks about the official rates. So, it is good for us to know what percentage of our transactions is in the parallel market and what percentage is from the official market.”

Also reacting, the Lead Director Centre for Social Justice, Eze Onyekpere, said the figures released by the NBS do not reflect the true state of inflation in Nigeria.

“That figure cannot possibly be true as everyone knows that the prices of goods and services have more than doubled. So, on what basis are they giving us the figures they have?

“We had thought that maybe in June the increases in the cost of energy had not reflected but that excuse is no longer tenable today. They need to explain to Nigerians how they arrived at the rate they are presenting,” he said.

According to him, the prices of goods and services in the market are far higher than this.

“It appears they have started politicizing the work of the Bureau and that is unfortunate. It looks like everything is now propaganda,” he said.

On his part, the CEO of Dairy Hills Limited, Kelvin Emmanuel, admitted that headline inflation numbers for July at 24.08 per cent and food inflation at 26.98 per cent, were not the accurate representation of the hike in energy and food prices the country has experienced from the deregulation of petrol pricing and devaluation of the naira.

He argued that deposit money banks embarking on fund raising exercises to not only shore up their total capital as a tool to maintain their capital adequacy ratio on rising non-performing loan books, it is also an indication that the apex bank might soon call for capital revaluation exercise of gearing ratio.

He added, “Nigerians will have to brace up for higher commercial lending rates, higher bond yields as the government experiences higher premiums to borrow from the markets, less access to commercial loans, as the banks weigh the ability of customers to pay back interest and principal in this very tough economic environment.”