American Economist Disagrees With Nigeria’s 20.77% Inflation Figures

Steve Hanke, a professor of applied economics at the Johns Hopkins University, Maryland has disagreed with the National Bureau of Statistics on Nigeria’s inflation figures.

Hanke who is popular for his works as a currency reformer in emerging-market countries, put Nigeria’s inflation at 35 per cent year-on-year.

Hanke said on Wednesday that, “With Buhari at the helm, Nigeria’s economy is tanking. In this week’s inflation table, NGA takes the 19th place. On October 13, I measured Nigeria’s inflation at a punishing 35%/yr.”

His position defers with NBS’ data which puts inflation at 20.77 per cent in September, 2022, while food inflation was 23.34 per cent.

Hanke’s annual inflation are measured using Purchasing Power Parity from free and black-market exchange rates.

However, NBS methodology uses “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.

Asides Hanke’s position, Bismark Rewane, the Chief Executive Officer of Financial Derivates Company had argued that inflation report in Nigeria does not represent current suffering of Nigerians.

Rewane’s FDC always push out neo-liberal economic ideas to influence policy in Nigeria.

According to him, if the consumer basket is reconstructed to align with the correct consumption pattern, the figures may exceed 80 per cent.

“Nigeria’s Consumer Price Index (CPI) Basket is redundant,” having been last reconstituted in 2009, Rewane had said.

In July when NBS inflation data for May was 17.71 per cent, he said the “data does not reflect market reality, as inflation will be much higher (45.64 per cent) if the basket was reconstituted. Our synthetic basket shows 84.09 percent.”