Generally, price indices are measures of proportionate or percentage changes in a set of prices over time. According to the International Labour Organisation (ILO), the “Consumer Price Index (CPI) measures changes in the prices of goods and services that households consume”.
More explicitly, the International Monetary Fund (IMF) describes the “CPI as an index number that measures changes in prices of goods and services purchased or otherwise owned by households, which households use directly or indirectly to satisfy their own needs and wants”.
In practice, the CPI is built using household surveys carried out at intervals to capture the expenditure and consumption patterns of households. Hence, the CPI basket differs across regions and countries as the weights attached to the commodities in the basket reflect the share of the household budget represented by the commodity.
Due to the dynamic nature of consumption and expenditure in the economy, the weights attached to the commodities and services change over time as consumers’ taste and income evolve, allowing several goods and services to replace previously consumed items or take a different share of household budgets.
Therefore, it becomes imperative that estimates of the CPI (and by extension the inflation rate), reflect prevailing consumption patterns, as inflation plays a critical role in the consumption, investment, wage and monetary decisions in the economy.
Composition of Consumer Price Index In Nigeria
According to the National Bureau of Statistics (NBS), the CPI comprises 740 regularly priced goods and services, broadly grouped based on the Classification of Individual Consumption According to Purpose (COICOP) standards.
The COICOP classification groups goods and services into thematic divisions that reflect similar purposes and use as consumed by citizens in the country. At the moment, the CPI basket in Nigeria is weighted based on a 2009 revision of the 2003/2004 National Standard of Living Survey. The weighting, as presently constituted, is displayed in Table 1 below, with the highest weight being attached to the Food and Non-Alcoholic Beverage category.
Reworking the Raffia, Evaluating the Components of the CPI Basket
Since the 2003/2004 National Living Standards Survey was carried out, the Nigerian economy has witnessed significant structural changes in the demand and consumption patterns, as well as the array of goods and services offered by producers in the market.
This raises concerns about the aptness of the estimations of consumption preferences and share of commodities in the household budget generated from the survey.
Notably, the surge in the share of telecommunications, recreation and culture, and entertainment-related expenditures in the overall household expenditure point to a new pattern in the consumption and expenditure of Nigerians.
It is also worthwhile to restate that although food expenditure might still constitute a significant portion of
household expenditures, the weights attached to other components of the COICOP divisions are worthy of evaluation. In addition, the likelihood of substitution and quality biases building up over time is without doubt as certain items such as the telephone and telefax equipment and services are overdue for replacement with items that are more amenable with current consumption patterns.
On the average, countries across the world review the components of the CPI basket and the weights attached to them every 3-5 years, as they expect that consumption patterns would have shifted over the period. In 2010, the South African Statistical Office stated that the CPI basket will be retooled every three years to reflect the socio economic conditions and the latest revision was effected in January 2017. Table 2 below details some of the revision witnessed in the US, Canada and South Africa from 2009 till date.
Call to Action
The premise supporting the re-evaluation of the components of the CPI basket as well as the weights attached to them is explicit and there is no doubt that the current CPI basket in Nigeria is not synchronized with present realities. More importantly, the policy, livelihood, and investment implications of the estimates of the consumer price index and by extension, the inflation rate, necessitate that the dynamics inherent in the consumption and expenditure patterns are properly captured and adequately reflected.
FAAN releases new guidelines for post COVID-19 flight operations
The new set of procedural guidelines for air travelers and other airport users is aimed at protecting all.
The Federal Airports Authority of Nigerian (FAAN), has released a new set of procedural guidelines for air travelers and other airport users. This follows the announcement of the Federal Government, the gradual commencement of domestic flight operations at the nation’s airports with effect from July 8, 2020.
This new Standard Operating Procedure (SOP) is aimed at protecting all stakeholders and preventing further spread of the coronavirus disease, especially through our airports.
This was disclosed in a press statement by FAAN on Friday, July 3, 2020, and signed by the agency’s General Manager Corporate Affairs, Henrietta Yakubu.
According to the procedures that have been outlined by FAAN in the “New Normal”, departing passengers must comply with the following guidelines;
- All passengers must arrive at the airport properly kitted with their face masks on.
- They must also ensure a minimum of one point five meters (1.5m) physical distancing, Aviation Medical/Port Health personnel would screen each passenger and ensure the use of face masks, those traveling with pets must get necessary clearance from Nigerian Agricultural Quarantine Services.
- All passengers’ luggage would be disinfected before entry into the departure halls.
- Passengers are required to wash their hands as often as possible, hand sanitizer would be provided for passengers before entrance, at the waiting halls/lounges and pre-boarding gates.
- All footwear would be disinfected/sanitized by foot mats placed at all entrances to the terminal building, amongst others.
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For arriving passengers, the following guidelines must be adhered to;
- On disembarking from the aircraft, passengers would observe physical distancing as they board the Co-Buses (Hand Sanitizer would be provided in the buses).
- Physical distancing protocols must be observed at the baggage claim area, where hand sanitizer is also provided, disinfected trolleys would be made available for passengers.
- All Covid-19 protocols must be observed while undergoing customs check, Passengers would exit the halls and head straight to the car park for pick up.
- If you must speak to anyone around, please speak to a properly tagged Aviation Security (AVSEC) officer, physical distancing would be maintained while waiting to be screened by personnel of port health services, amongst others.
- In addition to the above guidelines, passengers are required to observe social distancing and make use of the floor markings at the security screening area. They must also comply with all other security guidelines as laid down by officials of the Aviation Security (AVSEC) department.
FAAN asked all passengers and stakeholders to observe these new protocols that have been put in place for their protection.
First Bank’s FMAP graduates inuagural set of management associates
FMAP is a comprehensive developmental programme targeted at young, dynamic, highly driven individuals.
First Bank of Nigeria Limited, Nigeria’s leading financial inclusion services provider, has graduated 28 successful candidates in its inaugural FirstBank Management Associates Programme (FMAP), virtually held on Tuesday, 30 June 2020 via the Zoom video-conferencing application. The programme which commenced in 2018 had a total of 48 candidates selected from thousands of entries and applications received nationwide.
FMAP is a 24-month fast-track comprehensive developmental programme targeted at young, dynamic, self-motivated and highly driven individuals that possess the right skill set and excellent leadership potential among Junior and entry-level cadre staff. Entries and applications for the programme enrolment was also extended to the public
Speaking about the programme, Dr. Adesola Adeduntan, CEO, FirstBank said “It is an intensive skill development programme structured to enhance acute thinking, financial, methodical skills of staff. The bank would continue to reinvest in its human capital to create a kind of leadership needed for future growth and development.”
“This is part of the Bank’s strategic objectives of infusing and developing leadership at requisite levels across its staff hierarchy, aimed at building the next generation of leaders who will be groomed to drive the Bank’s vision of being Africa’s Bank of first choice,” he concluded.
At the end of the programme, successful candidates are moved to middle management, becoming Management Associates irrespective of their grades at the point of entry.
Cross country postings and secondment opportunities are also offered to such staff to provide them with global exposure and network.
First Bank of Nigeria Limited (FirstBank) is the premier Bank in West Africa and the leading financial inclusion services provider in Nigeria for over 125 years.
With over 750 business locations and over 57,000 Banking Agents spread across 99% of the 774 Local Government Areas in Nigeria, FirstBank provides a comprehensive range of retail and corporate financial services to serve its over 15 million customers. The Bank has international presence through its subsidiaries, FBN Bank (UK) Limited in London and Paris, FBNBank in the Republic of Congo, Ghana, The Gambia, Guinea, Sierra-Leone and Senegal, as well as a Representative Office in Beijing.
The Bank has been nimble at promoting digital payment in the country and has issued over 10million cards, the first bank to achieve such milestone in the country. FirstBank’s cashless transaction drive extends to having more than 9million people on its USSD Quick Banking service through the nationally renowned *894# Banking code and over 3 million people on FirstMobile platform.
Since its establishment in 1894, FirstBank has consistently built relationships with customers focusing on the fundamentals of good corporate governance, strong liquidity, optimised risk management and leadership. Over the years, the Bank has led the financing of private investment in infrastructure development in the Nigerian economy by playing key roles in the Federal Government’s privatisation and commercialisation schemes. With its global reach, FirstBank provides prospective investors wishing to explore the vast business opportunities that are available in Nigeria, an internationally competitive world-class brand and a credible financial partner.
FirstBank has been named “Most Valuable Bank Brand in Nigeria” six times in a row (2011 – 2016) by the globally renowned “The Banker Magazine” of the Financial Times Group; “Best Retail Bank in Nigeria” for seven consecutive years (2011 – 2017) by the Asian Banker International Excellence in Retail Financial Services Awards and “Best Bank in Nigeria” by Global Finance for 15 years. Our brand purpose is to always put customers, partners and stakeholders at the heart of our business, even as we standardise customer experience and excellence in financial solutions across sub-Saharan Africa, in consonance with our brand vision “To be the partner of first choice in building your future”. Our brand promise is to always deliver the ultimate “gold standard” of value and excellence. This commitment is anchored on our inherent values of passion, partnership and people, to position You First in every respect.
Group Head, Marketing & Corporate Communications
Apapa Command’s revenue rises 10.59% to N227.3 billion in the first half of 2020 – Customs
Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges.
The Nigerian Customs Service announced on Thursday that its revenue for the Apapa Command rose by 10.59% from the previous year as it has generated N227.3 billion during the first half of 2020.
While disclosing this, the Customs Area Controller, Mohammed Abba-Kura said, “There has been a steady improvement in revenue collection all through the half-year except for the month of May which recorded a decline of about 3.531 billion, when compared between year 2019 and 2020. The command in the half-year of 2019 collected a total sum of N203.264 billion as customs duty and other charges like seven percent surcharge, Value Added Tax, one percent Comprehensive Import Supervision Scheme (CISS) among others.
“From January to June this year, the command collected a huge sum of N227,347,046,233.53, which represents an increase of N24,082,991,550.84 or 10.59 percent increase from the previous year.”
According to NAN, Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges they have faced this year.
“In spite of all challenges, the Apapa Area Command has maintained its tempo at ensuring that maximum revenue is collected in addition to trade facilitation and suppression of smuggling,” he said.
The Area Controller further disclosed that the Command seized 142 containers of various items during the period. The seizures were related to smuggling and were seized pursuant to sections 46 and 48 of the Customs and Excise Management Act (CEMA) which enforces laws related to forfeiture of goods that are illegally imported.
The seized goods ranged from luxury cars like Rolls Royce 2018 and a 2019 Lamborghini Hurricane. Others include pharmaceuticals, rice, clothes, assorted foodstuff, and other materials.
Meanwhile, in terms of exports, the value of exported products so far is about N52,369,506,770.90 – Free on Board Value, mainly Agricultural produce and Mineral resources.
Unfortunately, the Coronavirus pandemic has inevitably affected the operations of the Command this year.
According to Abba-Kura, “ten of our men in Apapa command got infected with COVID-19 and were sent to the isolation centre and as at today, they are all well now and we appreciate the Lagos State government and doctors at the Lagos University Teaching Hospital for their help.”
Note that the Customs revenue growth comes at a time of declining revenue for Nigeria, even as the Federal Government’s debt service as a percentage of revenue rose to 99% in the first quarter of 2020. Therefore, it is a good development.
Nairametrics reported the country earned N950.5 billion in revenue compared to a prorated budget of N1.9 trillion, representing a whopping shortfall of 52%. Oil revenue was N464 million representing a shortfall of 30% when compared to budget while non-oil revenue was N269 billion representing a shortfall of 40% in the first quarter of 2020.