NBS: Inflation jumps to 12.34 per cent

The National Bureau of Statistics  (NBS) yesterday said that in April 2020, inflation increased by 12.34 per cent.

According to the bureau’s report on its website,  “Consumer Price Index, the consumer price index, (CPI) which measures inflation, increased by 12.34 percent (year-on-year) in April 2020. This is 0.08 percent points higher than the rate recorded in March 2020 (12.26 percent).

“On month-on-month basis, the Headline index increased by 1.02 percent in April 2020. This is 0.18 percent rate higher than the rate recorded in March 2020 (0.84 percent).”

The report added that  increases were recorded in all COICOP divisions that yielded the Headline index.

NBS said the corresponding 12-month year-on-year average percentage change for the urban index is 12.26 percent in April 2020. This is higher than 12.15 percent reported in March 2020, while the corresponding rural inflation rate in April 2020 is 11.20 percent compared to 11.14 percent recorded in March 2020.

The report said “On a month-on-month basis, the urban index rose by 1.06 percent in April 2020, up by 0.18 from 0.88 percent recorded in March 2020, while the rural index also rose by 0.98 percent in April 2020, up by 0.18 from the rate recorded in March 2020 (0.80) percent.”

According to the report, the percentage change in the average composite CPI for the 12 months period ending April 2020 over the average of the CPI for the previous 12 months period was 11.71 percent, showing 0.09 percent point rise from 11.62 percent recorded in March 2020.

The urban inflation rate, said NBS, increased by 13.01 percent (year-on-year) in April 2020 from 12.93 percent recorded in March 2020, while the rural inflation rate increased by 11.73 percent in April 2020 from 11.64 percent in March 2020.

The NBS explained that the  CPI measures the average change over time in prices of goods and services consumed by people for day-to-day living.

It noted that 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. 3.

“The Rural National index 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. The survey methodology generates 3774 all items indices for all states and the FCT. “

N1.16tn Pension Fund Meant For Infrastructure Idle – Pencom

The National Pension Commission on Wednesday said that out of the N1.16tn pension fund assets available for investment in infrastructure, only N1.36bn had so far been invested in infrastructure bonds.
This, according to the commission, leaves about N1.159tn idle and unable to be invested in the provision of critical infrastructural projects.

The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, gave this figure during a presentation to the House Committee on Pensions at the public hearing on the need to invest pension funds to meet Nigeria’s infrastructural challenges.

In her presentation, a copy of which was made available to our correspondent, the DG said the inability to get instruments to invest the amount had been a problem.

Anohu-Amazu said while the regulations allowed for investment of pension fund assets in infrastructure through infrastructure bonds, the commission had yet to find viable instruments through which to channel the funds.

She said, “The investment regulations allow for investment in infrastructure through infrastructure bonds and infrastructure funds. However, despite the availability of about N1.16tn for infrastructure financing, only N1.36bn had been taken as of December 31, 2015, leaving about N1.159tn untapped.

“This is largely due to the non-availability of investment instruments that qualify for pension investment as stipulated in the investment regulations issued by the commission.”

The DG stated that the country’s infrastructure deficit, which currently stands at about N23tn, was a matter of concern to the government as it would be difficult to address with budgetary allocations alone.

She explained that while the Federal Government’s budget offered limited funds for infrastructure development due to competing demands, the long-term financing market was also underdeveloped, shallow and offered limited capital for deployment to develop infrastructure.

Anohu-Amazu said, “Capital provided by pension funds, which are long-term obligations, are best suited to address the need for long-term financing instruments that have maturities commensurate with the long-term nature of infrastructure projects.

“Indeed, several countries in Europe, North and Latin America as well as Africa have successfully utilised part of the accumulated pension funds by investing in new infrastructure projects or renewing dilapidated ones.

“It is, therefore, understandable that given the infrastructure deficit in Nigeria, pension funds need to be mobilised for investment in such projects.”

On how much has been contributed into the pension funds, the Pencom DG said the value of the assets stood at about N5.3tn.

The funds, according to her, have been invested in various approved assets classes within the limits allowed by the investment regulations.

For instance, she said 66 per cent of the pension assets were invested in Federal Government securities, while investment in equities and money market securities were moderate at 11.05 per cent and 10.58 per cent, respectively.