The National Bureau of Statistics recently reported that the Consumer Price Index which measures the rate of inflation rose 12.7% year on year. It was 12.9% in April 2012.
The Inflation rate has stubbornly held steady at double digit figures over the last one year after hit a 3 year low of 9.4% and 9.3% in July and August respectively in 2011. This is despite the strict monetary policy tightening of the Central Bank. See below:
The bureau attributed the increase to rise in prices of farm products such as vegetables which are usually in short supply this time of the year. Urban Inflation was 14.1% and Rural 11.7% as well. According to the report in May, month on inflation rose 0.75% from the preceding month of April 2012.
Whilst the inflation rate for May is lower than that of April it is still stubbornly high which is no good for businesses. For example, people who save money in banks, will see value lost and those who lend will have to grapple with higher interest rates. Consumers on the other hand will continue to deal with higher food prices even though there is no significant increase in their income. A little bit of inflation is good sometimes but not at double digits.
*See Ugodre’s previous article on taxation-for-nigerian-musicians
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