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In an apparent deference to what many Nigerians have always
known, the National Bureau of Statistics (NBS) has revised inflation figures,
backdating it to last November. The figures, which are yet to be released
officially, said year on year consumer inflation stood at 13 percent, compared
to 14.1 percent revised for June. Previous official inflation figures for June
were given as 10.3 percent.

Apart from November figures, which remained unchanged at 12.4
percent, all other inflation figures for each month within the period were
revised upward. The revised figures were due to adjustments to previous data
available to the bureau. By these revised figures, the inflation figures for
July were still lower than that of the previous month.

For instance, previous inflation figures for December, January,
February, March, and April, which were given as 12.0 percent, 12.3 percent,
12.3 percent, 11.8 percent, and 12.5 percent, were revised to 13.9 percent,
14.4 percent, 15.6 percent, 14.8 percent, and 15 percent.

More reflective

Wale Abe, chief executive officer of Financial Market Dealers
Association (FMDA), said the inflation figures for July was more reflective of
what is on ground. Mr. Abe said the inflation figures were likely to continue
due to increased spending by government.

“The CBN (Central Bank of Nigeria) will try its best to manage
the situation, but we know that unfortunately, it has little control over
fiscal policies of government. This is an election year and a lot of money will
find its way into the system,” he said.

Razia Khan, head of Macroeconomics, Regional Head of Research,
Africa, at Standard Chartered Bank, London, made a similar observation in her
forecast of the economy released yesterday.

Ms. Khan said the Central Bank would need to adopt measures in
order to keep inflation within manageable levels. “Increased OMOs (Open Market
Operations) may be necessary if excess liquidity feeds into unsustainable
demand for FX, and the potential for pressure on the naira,” she stated in her
forecasts.

She said there were palpable concerns for the value of the naira
as a result of factors that would be outside the control of the CBN.

“A bigger issue is the sheer amount of liquidity that has been
pumped into the system, with spending ramped up dramatically in this year’s
budget, and an increased pace of disbursal from the excess crude account,
eroding much of Nigeria’s saved oil windfall.”

Ms. Khan expressed concern that much of the inflation pressure
was from food items, with food inflation rising to 14 percent year on year,
from 12 percent the previous year. She said much of the pressure is from local food
items rather than imported food. “The pressure is much more likely to be
localised, but with August and September traditionally seeing food prices
coming off, we are not yet overly concerned about the near term outlook for
Nigerian inflation.”

Efforts to get further clarification on the revised inflation
figures were not successful.

Sunday Ichedi, NBS head of statistical information, said that the revised
figures were yet to be released officially and so he would not comment on the
issue. “I am yet to get the hard copy myself,” Mr. Ichedi said.