Inflation
April 16, 2018
A statistician, Dr Olatunji Arowolo, says the country may experience high inflation rate due to demand and spending pattern as it prepares for the 2019 elections.
Inflation is the rate at which the general level of prices of goods and services is rising, and consequently the rate at which the purchasing power of currency is falling.
Arowolo, a lecturer at the Statistics Department, Lagos State Polytechnic, told the News Agency of Nigeria (NAN) in Abuja, that demand pattern would likely cause changes in prices of goods and services.
He said people would envisage scarcity of some goods, and thereby, tend to produce in large quantities ahead of the elections and hoard them.
“This causes artificial scarcity and demand will be higher than supply, thereby causing general rise in the prices of these goods in particular and other goods and services in general.
“’Example is petrol. If there is hike in the price of petrol, it can lead to rise in other goods and services.’’
Arowolo, also a National Secretary of the Nigerian Statistical Association, said that the situation would cause chain effects as well.
He said farmers would spend more to transport the goods to the market which would cause the market women to add more money to the prices of goods.
“This is because market women pay for education service for their children and teachers in turn would demand higher pay and the cycle continues.’’
In addition, he said people tend to buy more and store them to reduce the risk of going to the market during election period, saying “this mentality is common to many, thereby, making goods to be scarce at that point.’’
Arowolo, however, said that the present inflation figures did not reflect a better standard of living for Nigerians.
Nigeria’s inflation rate measured by the Consumer Price Index (CPI) dropped from 14.33 in February to 13.34 per cent in March year-on-year, according to the National Bureau of Statistics (NBS).
The bureau stated that the figure showed 14 consecutive reductions in inflation rate since January 2017.
According to the bureau, the figure is 0.99 per cent points less than the 14. 33 per cent recorded in February.
Arowolo said the figure did not reflect a better standard of living because the prices of goods and services in reality did not decrease as reported by the CPI.
“CPI of 13.34 per cent year-on-year means that there is general rise in the prices of goods and services by 13.34 per cent from one year to another from the period under review.
“This means that on the average, the prices of goods and services reduced 0.99 per cent on monthly basis from January 2017 to February 2018,’’ he said.
