Manufacturers Reject NBS Inflation Figures, Claim True Rate Over 90%

Nigeria’s inflation statistics have sparked a significant controversy as the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) released figures that starkly contradict those of the National Bureau of Statistics (NBS).

The NBS recently reported a Consumer Price Index (CPI) increase, showing the headline inflation rate climbed to 34.19% in June 2024 from 33.95% in May. However, NACCIMA President Kelvin Oye disputed this, claiming that inflation is “over 90%,” though he provided no additional details.

The NBS attributed the inflation rise primarily to increased food prices, citing items such as millet, garri, guinea corn, and yams. Food inflation specifically grew to 40.87% in June from 40.66% in May 2024. Analysts noted that the NBS figures surpassed both individual and consensus forecasts, suggesting the situation is more dire than anticipated.

Financial analysts expressed concern over the NBS figures. David Adonri, Executive Vice Chairman at Highcap Securities Limited, criticized the Central Bank of Nigeria’s (CBN) monetary policy measures as ineffective against the rising inflation. He advocated for supply-side fiscal policies instead.

Comercio Partners analysts predicted that short-term government interventions, including a N2 trillion package to curb rising prices and a 150-day duty-free import window for certain staples, might stabilize food inflation temporarily. However, they emphasized the need for long-term solutions to underlying issues like transportation, logistics, and regional insecurity.

CardinalStone Finance analysts highlighted that food basket costs and insecurities are still driving up prices. They anticipated mixed outcomes for July’s inflation, pointing to recent PMS scarcity and another electricity tariff hike as potential inflationary pressures.

Public policy analyst Clifford Egbomeade emphasized the broader economic implications of the 34.19% inflation rate, noting its potential to reduce purchasing power, increase economic hardship, and deter investment. He suggested a combination of monetary tightening and prudent fiscal policies to address the issue.