By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-Nigeria’s April 2012 inflation rate Tuesday rose to 12.9 percent (12.9%) Year-on-Year (YoY) compared to 12.1% reported in March 2012, The National Bureau of Statistics (NBS) has said.

The NBS said in contrast, food inflation dipped by 60bps to 11.2% YoY from 11.8%. Core inflation (measured by All Items Less Farm Produce Index) also dropped to 14.7% YoY from 15.0% in March 2012.

NBS said the higher YoY change could be partly attributable to base effects as the index was relatively more stable in April of 2011.

“This is because lower price levels in April 2011 will reflect higher year-on-year percentage changes in April of 2012.

The Statistics Bureau said on a monthly basis, the composite Consumer Price Index (CPI) was higher by 0.13 percent when compared with March 2012, as prices moderated in April.

“The increase in the headline index, composed of the core and food indices, was partially due to the higher price levels in the economy. However, this was moderated by lack of constant liquidity in the economy” the Statistics Bureau said.

NBS affirmed that the urban inflation rate was recorded at 13.4 percent year-on-year, while the rural figure was reported to be 12.4 percent for April 2012.

According to the NBS, the urban All Items index increased by 0.3 percent on month-on-month, while the corresponding rural index increased marginally by 0.01 percent, when compared with the preceding month.

The largest component of the Index is Food inflation, the NBS reported a slightly fall of 11.2% compared to 11.8% in March 2012; indicating a fall of 0.2%.

“In April, the level of the Composite Food Index was higher than the corresponding level a year ago by 11.2 percent. Compared with March 2012, average monthly food prices rose in April 2012 by 0.2 percent” the Report said.

The NBS said this rise in the food index while moderate was mainly due to marginal increases of most food classes, “for instance, bread and cereals, meat, and fish, as well as the increasing cost of other food products especially yams and other tubers as they have become relatively scarce due to the drawdown from the end of year harvest. The average annual rate of rise of the index remained at 10.3 percent (year-on-year) for the twelve-month period ending April 2012” NBS said.

According to a Research Note by Afrinvest West Africa, Economic and Investment Firm, the 12.9% inflation rate recorded in April 2012 is 80 Basis Points (BPs)

Afrinvest Research affirms that it identifies the new tariff regimes on certain food imports and the partial removal of subsidies on premium motor spirit (PMS) as key contributors to the increase in CPI and expects it to remain a double digit figure in the near term.

“We also note that the upward (c.5.0%) adjustment to aggregate fiscal spending by the House of Assembly and the expected increase in electricity tariffs by June this year are factors that pose near term threats to inflation” Afrinvest said.

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