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THE NIGERIAN ECONOMY: INFLATION

From Adetoro Tokunbo (lagos) Nigerias grip on inflation rate is becoming consistent at third quarter with a single digit at 9.3 percent, and with an impressive economic growth rate at 7.72 percent in August. So far a significant development and good track record is brewing, for at the beginning of third quarter inflation rate was 9.4 percent in July, and the latest recorded 9.3 percent shows a slightly declining inflationary trend. But looking at the countrys misery indicators intrinsically overwhelming poverty and crushing unemployment; these fabulous numbers are not making impact to the suffering masses that are without jobs and are etching out a living with less than two dollars per day. Economic experience by average Nigerian, who can barely feed his family three decent square meals per day cannot correlate with the economic expansion of the countrys GDP. Positive economic growth should fundamentally ameliorate the misery index, lest it become senseless and insignificant to the majority of Nigerians. Before Nigerian financial and economic policy makers beat their chest and celebrate with their talking drums they should realize that the country is not yet out from the wood. The much talked removal of oil subsidy and its implementation has not been resolved and neither the recapitalization of collapsing banks has been ceased. Lets not overlook the increasing growth in food prices, which is the biggest contributing force to the consumer inflation rate. The food inflation rose from 7.9 percent in July to 8.7 percent in August and that is not good. With these enviable numbers on inflation and GDP rolling out from the National Bureau of Statistics (NBS), the life style and economic wellbeing of 70 percent of Nigerians are stagnant and deplorable. There is no adequate housing, the food prices are going beyond the reach of the poor while the scarcity of the expensive kerosene makes life unbearable. Nigeria is in the midst of confidence building news on economy and one cannot downgrade it. With decreasing turmoil at the Niger Delta; oil production in the second quarter of this year is averaging 2.45 million barrels daily. This is an improvement compared to 2.35 barrels of the previous year with more turbulent Niger Delta. Bloomberg reported that Inflation in Nigeria, Africas biggest oil producer, stayed near the limit of a central bank target and the economy expanded 7.72 percent in the second quarter, keeping pressure on the bank to raise interest rates. The inflation rate fell for a second month to 9.3 percent, the lowest level in more than three years, from 9.4 percent a month earlier, Yemi Kale, head of the National Bureau of Statistics told reporters today in Abuja, the capital. Much of the improvement in headline consumer price inflation can still be explained by the positive influence of domestic food prices, and this should continue in the months ahead, Razia Khan, the Londonbased head of African economic research at Standard Chartered Bank Ltd., said today in an emailed note to clients.