The march 2018 inflation for Nigeria is out and published by the National Bureau of Statistics. This article is a detailed breakdown of Nigeria Consumer Price Index for the month of March 2018 (Nigeria CPI). In reading this article, you will be able to know the status of inflation in Nigeria as of the month of March, 2018.
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 CPI requires skills of economists, statisticians, computer scientists, data collectors and others.
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 of 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 price.
Next the Laspeyres formula is used to compute an aggregated index for each class (which has a multitude of commodities which have similar consumption purposes): Here 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 to derive:
1. The country composite index
2. The Urban National index
3. The Rural National index
4. The Combined Urban and Rural State Composite index
The survey methodology generates 3774 all items indices for all states and the FCT.
All Item Index
The Consumer Price Index (CPI) which measures inflation increased by 13.34 percent (year-on-year) in March 2018. This fourteenth consecutive disinflation since January 2017 is 0.99 percent points less than the rate recorded in February 2018 (14.33) percent.
Increases were recorded in all COICOP divisions that yield the Headline Index. On a month-on-month basis, the Headline index increased by 0.84 percent in March 2018, up by 0.05 percent points from the rate recorded in February.
The percentage change in the average composite CPI for the twelve month period ending March 2018 over the average of the CPI for the previous twelve month period was 15.60 percent, showing 0.33 percent point lower from 15.93 percent recorded in February 2018.
The Urban inflation rate eased by 13.75 percent (year-on-year) in March 2018 from 14.76 percent recorded in February, while the Rural inflation rate also eased by 12.99 percent in March 2018 from 13.96 percent in February.
On month-on-month basis, the urban index rose by 0.86 percent in March 2018, up by 0.04 from 0.82 percent recorded in February, while the rural index also rose by 0.82 percent in March 2018, up by 0.05 from 0.77 percent recorded in February.
The corresponding twelve month year-on-year average percentage change for the urban index is 15.87 percent in March 2018. This is less than 16.24 percent reported in February, while the corresponding rural inflation rate in March 2018 is 15.34 percent compared to 15.64 percent recorded in February.
The Composite Food Index rose by 16.08 percent (year on year) in March 2018, down from the rate recorded in February (17.59 percent).
On a month-on-month basis, the Food sub-index increased by 0.90 percent in March 2018, up by 0.05 percent points from 0.85 percent recorded in February.
The average annual rate of change of the Food sub-index for the twelve-month period ending March 2018 over the previous twelve month average was 19.29 percent, 0.23 percent points from the average annual rate of change recorded in February (19.52) percent.
The rise in the food index was caused by increases in prices of Bread and cereals, Fish, Oil and fats, Vegetables, Fruits, Coffee, tea and cocoa, Meat, milk, cheese and eggs.
All Items Less Farm Produce (Core Inflation)
The ”All Items less Farm Produce” or Core inflation, which excludes the prices of volatile agricultural produce, rose by 11.2 percent in March 2018, down by 0.5 percent points from the rate recorded in February (11.7) percent.
On a month-on-month basis, the Core sub-index increased by 0.84 percent in March 2018, higher by 0.09 percent when compared with 0.75 percent recorded in February.
The average 12-month annual rate of change of the index was 12.33 percent for the twelve-month period ending March 2018; this is 0.34 percent points lower than 12.67 percent recorded in February.
The highest increases were recorded in prices of Clothing materials, Garments and other articles of clothing and clothing accessories, Vehicle spare parts, Fuel and lubricants for personal transport equipment, Actual and imputed rentals for housing, Passenger transport by road, Hairdressing salons and personal grooming establishments, Shoe and other footwear, Maintenance and repair of personal transport equipment and Paramedical services.
All Items Inflation
In March 2018, all items inflation on a year on year basis was highest in Bauchi (16.38%), Kebbi (16.36%) and Nasarawa (16.33%), while Kwara (10.30%),Kogi (10.87%) and Delta (11.17%) recorded the slowest rise in headline Year on Year inflation.
On a month on month basis however, all items inflation was highest in Nasarawa (2.20%), Ebonyi (2.10%) and Bauchi (1.87%), while Yobe (0.07%) recorded slowest rise and Kebbi and Kwara recorded price deflation on a month on month all item basis in March 2018.
In March 2018, food inflation on a year on year basis was highest in Nasarawa (20.83%), Bayelsa (19.03%)and Yobe (18.93%), while Kogi (11.99%), Bauchi (12.60%) and Benue (13.07%) recorded the slowest rise in food inflation.
On a month on month basis however, March 2018 food inflation was highest in Nasarawa (3.22%), Ebonyi (2.97%) and Jigawa (2.37%), while Kebbi, Imo. Niger, Kwara, Lagos, Rivers and Yobe all recorded food price deflation or negative inflation (general decrease in the general price level of goods and services or a negative inflation rate) in March 2018.
Credit :- National Bureau of Statistics Nigeria