NIGERIA INFLATION RATE (2000 TO 2011)
Index mundi inflation rate statistic shows the following conditions.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
6.5%
14.9
14.2
13.8
16.5
13.5
10.5
5.4
11.6
11.5
13.9
Last month of September 2011 the inflation rate are already 9.5 and still continue to rise in the next few months. The inflation rate in Nigeria for the last three years somehow shows a steady projection although it is still high in the eyes of foreign economy the stability concern should not be weigh down as long as it stand firm in its direction unless otherwise a natural disaster, a civil war or economic, social or political turmoil would occur in the next few years in Nigeria.
During the previous year’s Nigeria has been politically unstable that also causes a less confidence from other foreign investors to put up their business in their country that they are afraid that political rivalry may even rise up to civil war and economic downturn. There are many reports of corruptions in the early years of 2000, lack of infrastructure including roads and bridges that delimit the transport of products and services to major trading areas. One of the biggest contributing factors why the inflation rate in Nigeria is usually high is because of the high cost of electricity that they use in production of their products. Another factor is the production of their crops and the high price of materials in farming that usually come from other countries.
The increase in price of basic commodities such as in food and clothing and raw materials for business is the usual damage of inflation in their community. During 2001 Nigeria suffered from economic imbalance because of government over spending in central expenditure, poor foreign economic participation and political struggle when they experienced double digit inflation rate this inflationary statistic still prevented the government to further concentrate on more of infrastructure but a tight budget and still a slow motion in economic growth conditions. Nigeria is also known to have an oil rich deposit and in fact the country has become very dependent in this sector that it provide 90 to 95% foreign earning and as high as 80% on national revenue.
This condition even pressured the government to delay some of their project creation and community development that they even plan on oil deregulation according to their new Finance Minister Ngozi Okonjo Iweala. This can obtain a good impact on inflation rather than the removal of subsidies in petroleum products but the government believe that cut cost of fuel subsidies can generate as much as 1.2 trillion Nigerian Naira that adds up to the government budget if implemented, this proposal is still under condition debated in National Assembly which is subject to approval, they also plan on cut costing government expenditure in order to save their resources.
Another major contributing factor of high inflation rate of Nigeria is its foreign debt and reliance that during the year of 2000 they have received a deal in Paris Billion dollars credit in International Monetary Fund (IMF) that they have used until 2002. By the end of 2004 they gather a debt in Paris Club a total of Billion dollars. The total foreign debt of Nigeria in 2005 stood about Billion dollars and they have already paid almost Billion dollars in Paris Club and London Club last 2006. Only in the late 2007 they have experience economic recovery and in 2008 the government starts to shape up to reduce or maintain the inflation rate by implementing various economic reform and business improvement, modernizing banking system, blocking excessive wage increase and eliminating regional conflicts that have long divided their country.
Macroeconomic and community development has been a challenge to the economic reform has been stagnant although there were many discussions and plans. They have already decided to continue the blueprint in most of their infrastructure toward the development of public and private roads to give way to economic trading in far region communities. The distribution of earning coming from economic recovery and participation and oil income is evenly divided from different regions to further increase fund and wealth creation. From 2007 to 2010 they have already strengthen oil distribution in global market. They also include privatization of electricity generation and distribution facilities, if this effort continues they have a strong consideration to reach a better financial success and a good inflation standing in the next few years to come. Nigeria, just like in any other country in Africa still has a long road ahead to gain a total economic freedom but their journey continues to show a good starts.
Credit:ivythesis.typepad.com
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