Inflation Rate Drop Contradicts Market Realities, Says OPS

The Organised Private Sector (OPS) has raised concerns over the reported decline in Nigeria’s inflation rate, describing it as contradictory to the economic hardships faced by businesses and consumers across the country.

On Monday, the National Bureau of Statistics (NBS) released its Consumer Price Index report, indicating a further reduction in inflation, with the headline rate easing to 32.15% in August 2024, down from 33.40% in July.

While the NBS stated that inflation had dropped consecutively for two months, the OPS disagreed. They argue that the figures do not reflect the current economic challenges, particularly the rising cost of goods and the increase in petrol prices.

Dele Oye, President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), questioned the credibility of the NBS report. “The figures are grossly at odds with the escalating cost of living and doing business. Prices of goods and services have doubled, if not tripled, largely due to the surge in petroleum prices,” he said.

He highlighted the Nigeria National Petroleum Company Limited’s (NNPC) announcement that petrol from the Dangote Refinery would sell for over N1,000 per liter in the far north, illustrating the growing fuel supply shortages and soaring costs.

According to Oye, the rising fuel prices have had a ripple effect, driving up transportation costs and increasing the prices of food, manufactured goods, and other commodities. He argued that the inflation rate in August should have been higher, especially given the scarcity of petrol, which forced many Nigerians to buy from black markets at inflated prices.

Oye also criticized the Central Bank of Nigeria’s monetary policies, stating that interest rate hikes and poor naira management have failed to curb inflationary pressures. He urged the NBS to revisit its data collection methods, calling for a more accurate representation of Nigeria’s true inflation status.

Femi Egbesola, President of the Association of Small Business Owners of Nigeria, echoed Oye’s concerns. He noted that despite the reported decrease, prices of goods continue to climb, largely driven by the increase in petrol pump prices. “It’s difficult to understand how inflation is dropping when prices are rising,” he said.

However, Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry (LCCI), offered a different perspective. He stated that the slight decline in inflation was expected, noting that the surge in petrol prices primarily occurred in September. “We are beginning to see a small decline because we are nearing the peak of inflation,” Idahosa explained.

Despite this, Idahosa warned that it would be challenging for the inflation rate to continue its downward trend throughout the second half of 2024, given the fundamental drivers of inflation, such as petroleum, exchange rates, and food supply, remain volatile.