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Inflation Rises to 12.8% on Political Spending

By on April 19, 2011

Inflation rate in Nigeria rose to 12.8 percent year-on-year in March 2011, higher than the 11.1 per cent recorded the previous month, the National Bureau of Statistics (NBS) has said.

Most analysts attributed the development to heavy political spending as a result of the ongoing elections.

According to a report titled: “Consumer Price Index (CPI): March 2011,” obtained on the NBS website yesterday, the monthly change of the CPI was 1.37 percent increase when compared with February 2011.

It explained that the urban ‘All Items’ monthly index rose by 0.7 per cent while the corresponding rural index rose by 1.9 per cent when compared with the preceding month.

It further stated that the year-on-year average consumer price level as at March 2011 for Urban and Rural dwellers rose by 8.5 and 16.4 per cent respectively.

Inflationary threat which surfaced in the country since 2011 over concern about political spending led to the lifting of the Monetary Policy Rate (MPR) among other monetary policy instrument by the Central Bank of Nigeria (CBN). The move which was targeted at tightening monetary supply saw the regulator increasing the MPR by a total of 125 basis points from 6.25 per cent to 6.5 per cent at its first meeting this year and also to 7.5 per cent at it latest meeting.

“The percentage change in the average composite CPI for the twelve-month period ending March 2011 over the average of the CPI for the previous twelve-month period was 13 per cent.  This was slightly lower than the figure for the preceding month. The corresponding 12- month average per cent change for urban and rural indices rose by 10.3 and 15 per cent respectively,” it said.

Commenting on the ‘Food Index,’ it revealed that the average monthly food prices rose by 0.4 percent in March 2011 when compared with figure attained in February 2011.

Source : Thisday