The World Bank, European Union (EU), and other stakeholders are in the process of conducting the 2008/2009 harmonized Nigeria living standard survey (HNLSS) as a way of providing needed data for analysis of poverty in the country, according to a senior official of the National Bureau of Statistics, Nwaboku Ogugua Festus.
“The World Bank financed the conduct of 2003/2004 NLSS on which the Consumer Price Index (CPI) was revised. This Index series are being monitored internally and will be made public in due course,” Festus said during the opening ceremony of a National Workshop organised by the Central Bank of Nigeria (CBN) in Asaba, capital of Nigeria’s South-South Delta State.
Speaking on the topic, “Consumer Price Index and Computation of Inflation rate in Nigeria”, Festus said inflation was statistically measured by price indices, adding that the largely used ones were the Consumer Price Index (CPI), the Producer Price Index (PPI) and the Gross Domestic Product (GDP) Implicit Price Deflactors.
Festus pointed out that the CPI was the widely use for inflation targeting in countries such as United Kingdom, Australia, Sweden, Brazil, Egypt and South Africa.
In Nigeria, the National Bureau of Statistics (NBS) has the mandate to produce and publish the CPI result periodically.
It carried out this function in collaboration with interested agencies like the Central Bank and other Development partners.
The Index relates to all households living in the urban and rural areas except those in institutional homes.
The CPI is also compiled monthly from prices data observed in 90 urban towns and 333 Rural Enumeration Areas (EA’S).
The index in form of Statistical News is released about two weeks after the month of prices survey.
“The main objective of the current CPI is to measure changes in the average level of retail prices paid by consumers in both urban and rural areas of the country,” Festus explained.
Economists describe inflation as a situation of continuous rise in the general level of prices and a situation where too much money chases fewer goods and services.
It largely emanates in any economy when the community has increase in money supply but without corresponding increase in productivity, resulting in increase of goods and services.
To control inflation, governments usually, through the Central Bank, introduce several monetary policies.
This is a blend of measures designed to regulate the value, supply and cost of money consistent with the absorptive capacity of the economy.
“The ultimate goal of monetary policy is to ensure the achievement of a consiste ncy between the expansion in domestic liquidity and governments macroeconomic objectives of price and exchange rates stability, higher output growth, balance of payment equilibrium, full employment of resources and development,” said the Director of Research of the CBN, Charles Mordi.
Christopher Orubu, of the department of Economics, Delta State University, Abraka, said the ability of policy makers to control inflation depended on whether the underlying causes had been identified.
He remarked that some monetary and fiscal instruments of government fuelled inflation.
The Professor of Economics also fingered income policies, commercial policy instruments and supply side approaches as also capable of sparking inflation.
“There is the need to reduce the supply of money and credit in the economy. Increase interest rates to discourage borrowing by households and firms, ultimately will reduce aggregate demand. Open market operations, variable reserve ratios and credit guidelines”, he said could also be introduced to control inflation.