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64 CHAPTER 3


Figure 3.3 Comparing real and nominal CPI trends to real staples prices in Nigeria


Index 1.6


1.2 1.4


0.8 1.0


0.6 0.4


0.2


TOT-food (real index) CPI-food (nominal index) Four-staples (real index)


Sources: CPI data are from the Nigerian Bureau of Statistics. Staple prices are from GIEWS (2009).


Notes:


Staple prices include those for cowpeas, maize, millet, and sorghum, which were used to calculate an average price index with each commodity weighted by the staple’s share in dietary energy. CPI, Consumer Price Index; TOT, terms of trade.


observations, mostly from Latin America), followed by sorghum (27 percent, only nine observations), maize and rice (about 25 percent), and millet (20 percent, but only nine observations). Wheat prices rose by about 10 percent, perhaps because wheat prices rose earlier than those of some other com- modities. An important feature of Table 3.3 is that in all cases there was wide variation in price changes.


Table 3.4 explores this variation with a cross-country regression. The dependent variable is the change in the price of any given month over the corresponding month in 2007, so we again control for seasonality effects. Moreover, we can look at when prices were highest in 2008 relative to 2007. Unsurprisingly, price peaks occurred when international prices were signifi- cantly higher, albeit with some lag. Specifically, the seasonal price difference was highest in May, June, and July 2008. Prices continued to be significantly higher in August and September.


Jan 2005 Mar 2005 May 2005 Jul 2005 Jan 2006 Mar 2006 May 2006 Jul 2006 Jan 2007 Mar 2007 May 2007 Jul 2007 Jan 2008 Mar 2008 May 2008 Jul 2008 Jan 2009


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