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Nigeria’s Composite
Consumer Price Index (CPI) rose by 13.4 percent year-on-year in
October, according to the monthly price statistics report just released
by the National Bureau of Statistics.

“This is slightly
lower than 13.6 percent recorded in the previous month in the new CPI
series. The monthly change of the CPI was 0.3 percent increase when
compared with September 2010,” the report dated 16 November stated.

A Consumer Price
Index is expected to measure changes over time in the price level of
goods and services, purchased especially by households. The annual
percentage change in a CPI is usually used as a measure of inflation.

The nation’s bureau
said the urban all items monthly index rose by 0.5 percent, while the
corresponding rural index recorded 0.1 percent increase when compared
with the preceding month; and that the year-on-year average consumer
price level, as at October 2010, for urban and rural dwellers, rose by
11.5 and 15.0 percent respectively.

Food Index

The bureau said
average monthly food prices remained stable in October, when compared
with September, adding that the level of the Composite Food Index was
higher than the corresponding level a year ago by 14.1 percent.

“The average annual
rate of rise of the index was 14.9 percent for the twelve-month period,
ending October 2010. The marginal fall in the index was caused mainly
by slight decrease in the prices of some food items like yam, potatoes,
and other tubers, due to the harvest season,” the National Bureau of
Statistics said.

Lydia Olushola, an
economist and consultant at Skytrend Nig. Ltd., said for the everyday
consumer, a rise in CPI means prices of goods go up.

“The problem is
when their average wages do not increase in accordance with the CPI,
that is, if the CPI rises faster than people’s average wages, then the
consumers’ purchasing power declines. They can’t buy as much as
whatever it is they usually bought,” Ms. Olushola said.

Experts say
inflation effects on an economy can be positive or negative, as the
case may be. Inflation rates in Nigeria have peaked as high as 15.6 and
as low as 11.6 between October 2009 and October 2010.

Bismarck Rewane,
managing director, Financial Derivatives Company, a finance firm, said
“Inflation on items less farm produce increased from 1.3 percent to
12.8 in September, though that of food decreased by 1.1 percent to 14
percent, from 15.1 per cent and 11.3 percent in July respectively.
Presently, inflation is running at 13.6 percent. The current inflation
record is weak, due to fiscal spending,” adding that inflationary
pressures are likely to persist in November.

The Central Bank
said inflation depicts an economic situation where there is a general
rise in the prices of goods and services, continuously. It could be
defined as “a continuing rise in prices, as measured by an index, such
as the Consumer Price Index (CPI) or by the implicit price deflator for
Gross National Product (GNP).”

The bank said price
stability does not connote constant (or unchanging) price level, but it
simply means that the rate of change of the general price level is such
that economic agents do not worry about it. Inflationary conditions
imply that the general price level keeps increasing over time.