Higher Rent, Energy Prices Push Inflation Further to 18.55% Naira Falls to N497/$

•  Protest against CBN’s forex policy flops 

By Obinna Chima and James Emejo in Abuja

For the fifteenth straight month, the Consumer Price Index (CPI) which measures inflation increased to 18.55 per cent (year-on-year) in December last year compared to 18.48 per cent in the previous month, the National Bureau of Statistics (NBS) stated yesterday.

It attributed the 0.07 per cent hike in the headline index to price increases observed in all the divisions which determine the index.

According to the CPI figures for the month under review, Housing, Water, Electricity, Gas and Other Fuels, Clothing and Footwear and Education recorded the highest increases while Communication and Restaurants and Hotels recorded the slowest pace of growth in December, growing at 5.33 per cent and 8.91 per cent (year-on-year) respectively.

The Food Index rose by 17.39 per cent (year-on-year) in December 2016, up by 0.20 per cent points from rate recorded in November (17.19) per cent.

According to the NBS, all major food sub-indexes increased, with Soft Drinks recording the slowest pace of increase at 7.66 per cent (year-on-year).

Price movements recorded by all items less farm produce or core sub-index rose by 18.10 per cent (year-on-year) in December, down by 0.10 per cent points from rate recorded in November (18.20) per cent.

However, Urban index rose by 20.12 per cent (year-on-year) in December from 20.07 per cent recorded in November, while the rural index increased by 17.20 per cent from 17.10 per cent in November.

On month-on-month basis, the urban index rose by 1.08 per cent in December from 0.78 per cent recorded in November, while the rural index rose by 1.04 per cent in December from 0.79 per cent in November.

It added: “On a month-on-month basis, the core sub-index also eased by 0.62 percent in December, down by 0.09 percent points from 0.71 per cent recorded in November. The highest month on month increases were recorded in clothing materials and other articles of clothing, passenger transport by sea, hairdressing salons and personal grooming establishments, passenger transport by road, passenger transport by air, motor cycles and wine.”

Naira Depreciates to N497/$ on Parallel Market

In a related development, the Naira fell against the United States dollar to N497/$ on the parallel market yesterday, weaker than the N495 to the dollar it closed the previous day. The nation currency has been on the decline since Tuesday on the parallel market, losing N2 per day.

The development was attributed to weaker forex supply in the market, as demand continued to rise.

According to a currency trader who pleaded to remain anonymous, there has been intense foreign exchange demand for the payment of school fees abroad as well as from importers.

The Central Bank of Nigeria (CBN) on Thursday told Bureau de Change (BDC) operators that it does not intend to devalue the Naira and will support it at current levels, especially with a recent rise in oil prices.

The President of the Association of Bureau De Change of Nigeria (ABCON), Aminu Gwadabe said the CBN Governor,  Godwin Emefiele told the group in a meeting that it was looking at ways to boost dollar liquidity on the official market to eliminate the spread to the parallel market.

The government has been pressing retail operators to narrow what it says is a damaging gulf between the Naira’s official rate – currently N305 to the dollar – and the parallel rate. On Tuesday, the operators set their first ever reference exchange rate for the naira at 399 per dollar ahead of the apex bank meeting.

Protest against CBN’s Forex Policy Flops

Also yesterday, the attempt by a group to stage a protest against the foreign exchange policies of the CBN failed as the group led by Deji Adeyanju, could not muster enough public support.

The group which had earlier been described by the CBN as “paid hirelings and blackmailers” had been mobilising Nigerians to join the protest.

At about 9:30 am when some people gathered at a junction close to the Women Development Centre in Central Area, Abuja, the leader of the group, told reporters that they were not coming to make trouble, but rather to obtain explanations as to why the Naira should be allowed to weaken against the dollar.

Received by the policemen on routine duty at the junction, the group which had earlier been described by CBN’s Acting Director, Corporate communications, Isaac Okorafor, as “paid agents of selfish interests and the enemies of the Nigerian economy”, left the junction on their own after about five minutes.

The CBN had in statement alerted the public to an arranged protest by a paid group working for “powerful interests who want the CBN and government to reverse the policy on conservation of forex and sabotage the ongoing efforts to wean Nigerians from senseless importation.

“They want to create markets for importers to the overall detriment of the Nigerian economy. No amount of blackmail will make the CBN allow a practice where-by our farmers and industrialists who have invested heavily and employed our youths in the production of Nigerian-made rice, fish, industrial starch, palm produce, wheat, tooth pick, wines, etc, would be made to close their farms and factories again.

“What these charlatans and hirelings want is basically twofold. First they want the CBN to give out the nation’s scarce foreign exchange to their sponsors to import all manner of foreign goods and dump them on our markets thereby frustrating the good work our own farmers and manufacturers have begun,” the CBN said in a statement.

It added: “Second, they want the CBN to fold its arms and allow currency speculators to drive the Naira down to a level at which it will be easy for their paymasters to buy up and take control of the Nigerian economy. They have even gone to the extent of making false allegations that some banks are having trouble just to trigger panic in the financial system.

“These will not happen. Nigerians have rejected these foreign agents. 26 states have adopted the CBN Anchor Borrowers Progrmme (ABP). Nigeria is set to be self-sufficient in rice, fish and wheat production. What happened during the past Christmas and New Year celebrations has proved this,” he added.