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Despite the
escalating prices of food items in the country, figures from the
National Bureau of Statistics (NBS) indicate that Nigeria’s consumer
inflation fell to 11.8 percent year-on-year in March from 12.3 percent
the previous month.

The country’s
inflation rate recorded a decrease in March 2010, as it fell by 0.5
percent from what was obtainable for February. The figures from the
agency showed that there has been a steady decline in the inflation
statistics of the country in the last three months.

The inflation rate
stood at 12.3 per cent in January and February, but tilted toward a
single digit in March and this came as a surprise to many because of
the high price of food stuff due to transportation problems.

Previous data from
the agency indicated that the inflation rate dropped to 10.4 per cent
in September 2009, but climbed to 12.4 per cent in November 2009 and 12
per cent in December 2009.

Food items cause of inflation

The Central Bank of
Nigeria (CBN) and the NBS said the unpredictable change in inflation
rates had been largely driven by the changes in food prices.

The urban and rural
All Items index supported this figures, indicating that both increased
by 0.4 percent 0.1 percent, when compared to what was obtainable in
February.

This however had an
effect on the inflation rate as the year-on-year average consumer price
level as at March 2010, for Urban and Rural dwellers, rose by 7.7 and
13.8 percent respectively.

The report credited
the acceleration in the price of food items, which form the bulk of the
inflation index, as the reason for the increase in the rise, as the
Average Monthly Food prices rose by 0.4 percent in March 2010 when
compared with February.

This, some of the
traders blamed on the strike embarked upon by the Cattle Dealers
Association (CDA) and Food Stuff Merchants’ Association of Nigeria
earlier in the month, which led to scarcity of food items such as
tomatoes, pepper, cattle and others transported from the northern part
of the country.

The seven-day
strike had caused the price of food items in the market to escalate
over 500 percent in some cases as five pieces of fresh tomatoes was
sold between N400 and N500 in cases where they were at all available in
the market.

A balance

Though the agency
recorded a general drop in the monthly inflation, the report indicated
that Composite Food Index for the corresponding 12- month average
percent change for urban and rural indices rose by 8.4 and 13.6
respectively.

“This made the
level of the Composite Food Index (CPI) higher than the corresponding
level a year ago by 13.5 per cent putting the average annual index rise
to 13.7 percent for the twelve month period,” it stated.

The report
attributed the rise to increases in the prices of some food items like
yam, meat, sea foods, onions, fresh tomatoes and vegetables.

However, there was
a balance: the “All items less Farm Produce” index, which excludes the
prices of volatile agricultural products, fell by 0.2 percent for the
March when compared with the previous month.

According to the
report, the decline was due to reduction in the prices of cooking gas,
liquid and solid fuels, making the twelve-month index till March rise
by 9.5 percent while the average annual rate of rise of the index was
9.3 percent for the twelve-month period ending that same month.

Quarterly CPI change

A quarterly change
indicated that the ‘All Items index’ increased by 1.8 percent in the
first quarter of 2010 when compared with fourth quarter of 2009.

This is against the 1.5 percent rise recorded in the fourth quarter of the year 2009.