From Isaac Anumihe, Abuja
The Consumer Price Index (CPI) which measures the rate of inflation in the country, has again, dropped to 16.63 per cent, in September, 2021 from its previous level of 17.01 per cent in August, 2021.
Recall that inflation rate has been on the downward trend for six months, consecutively, due to what the Statistician-General (SG), Dr Simon Harry, said in a briefing, before the publication, was because of the conscious implementation of the Sustainable Developments Goals (SDGs) by the government.
The figure is 0.38 per cent points lower than the rate recorded in August 2021 (17.01) per cent.
‘Increases were recorded in all Consumption According to Purpose (COICOP) divisions that yielded the headline Index.
On month-on-month basis, the headline index increased by 1.15 per cent in September 2021. This is 0.13 per cent rate
higher than the rate recorded in August 2021 (1.02) per cent.
The percentage change in the average composite CPI for the twelve-month period ending September 2021 over the
average of the CPI for the previous twelve-month period, was 16.83 per cent, showing 0.23 per cent point from 16.60
per cent recorded in July 2021.
The urban inflation rate increased by 17.19 per cent (year-on-year) in September 2021 from 17.59 per cent recorded in
August 2021, while the rural inflation rate increased by 16.08 per cent in September 2021 from 16.45 per cent in August 2021.
“On a month-on-month basis, the urban index rose by 1.21 per cent in September 2021, up by 0.15 per cent the rate recorded in
August 2021 (1.06 per cent), while the rural index also rose by 1.10 per cent in September 2021, up by 0.11per cent the rate that was
recorded in August 2021 (0.99) per cent.
The SG said that the composite food index rose by 19.57 per cent in September 2021 compared to 20.30 per cent in August 2021.
“This rise in the food index was caused by increases in prices of oils and fats, bread and cereals, food products,
fish, coffee, tea and cocoa.
Others are potatoes, yams and other tubers and milk; cheese and egg.
“On month-on-month basis, the food sub-index increased by 1.26 per cent in September 2021, up by 0.20 per cent
points from 1.06 per cent recorded in August 2021.
The average annual rate of change of the food sub-index for the twelve-month period ending September 2021 over
the previous twelve-month average was 20.71 per cent, 0.21 per cent points from the average annual rate of
change recorded in August 2021 (20.50) per cent.
Recall also,
the CPI measures the average change over time in prices of goods and services consumed by people for day-to-day
living. The construction of the CPI combines economic theory, sampling and other statistical techniques using data
from other surveys to produce a weighted measure of average price changes in the Nigerian economy.
“The
weighting occurs to capture the importance of the selected commodities in the entire index. The production of the
”
Key in the construction of the price index is the selection of the market basket of goods and services. Every month,
10,534 informants spread across the country provide price data for the computation of the CPI. The market items
currently comprise 740 goods and services regularly priced.
The first stage in the calculation of the CPI is the collection of prices on each item (740 goods and services) from
outlets in each sector (rural or urban) for each state. Prices are then averaged for each item per sector across the
state. The next step is to use the average price to calculate the basic index for each commodity: The current year
price of each commodity is compared with a base year’s price to obtain a relative prices.
“The sum of the product of weights (obtained from the
expenditure survey) and relative prices for each item is divided by the sum of the weight of the items in that class,
and the result multiplied by 100 gives the required index number. This index number is still classified according to
the urban or rural classification sector for each of the 36 states
and the FCT. This yields 85 classes then 48 groups which are then reclassified into 12 divisions
“The survey methodology generates 3774 all items indices for all states and the FCT” NBS, said.