CONSUMER PRICE INDEX (CPI) Consumer Price Index (CPI) – FEBRUARY 2016

The Somaliland government is implementing the National Development Plan (NDP) 2012-2016. The NDP provides a medium term framework for achieving the country’s long-term development aspirations as set out in the Somaliland Vision 2030 and the Sustainable Development Goals (SDGs). To support the planning process, Somaliland also set up the legal and institutional framework for a National Statistical System (NSS). Accordingly, in 2013, the statistical law was passed by parliament and statistics development strategies were formulated by the government. The Central Statistics Department (CSD) which is the National Statistics Office (NSO) is mandated to collect data, process it, compute various indicators and disseminate them.

In this regard, the Consumer Price Index (CPI) based on the internationally recommended best practices using available data at the CSD. CPI is a flag bearer in many countries. In the case of Somaliland, the CPI is for some time, going to remain the flag carrier and the only economic indicator compiled regularly. Thus, the current CPI is one of the few tangible outputs that the Ministry of National Planning and Development (MNPD) is wielding on high demand. This implies that it is filling up a big gap in economic analysis and that in the future many decisions are likely to be based on it.

The 2012 calendar (January – December 2012) was chosen to be the reference year for the new CPI. The computation of the CPI started in January 2013 and now available up to January 2016. The All Items annual inflation rate stands at 14.2%, 16.6% for Food and 12.6% for Non-Food for January 2016.

In general, the CPI results show that food1 prices are persistently moving higher than prices for the nonfood category. Despite the fact that a big proportion of food is imported, food prices keep on varying and they vary sharply which implies that they are still affected by the seasonal factors such as drought and rainfall. However, when the seasonal factors are removed from the series, there is a clear indication that there exists underlying inflation within the economy. Further analysis shows that on average, and for the entire period of the CPI computation and its derived statistics, both food and non-food categories contribute equal percentage points to the total annual inflation rates. Since food has a smaller weight (38.7%) and that for the non-food (61.3%), it is still evidence for high inflation for food in Somaliland. This means that the majority of households with a fixed monthly income together with those with unstable income and without any savings find it difficult to have the same meals and of the same quality as it used to be the situation during the 2012 calendar year.

I would like to thank all staff at the CDS and more especially staff from the section of Macro Economic Statistics for their contributions and commitment to CPI work during the entire period of this project.

I now hope that this CPI will be extensively used to guide decision making both in government, private sector enterprises and households as well as at individual level.

Mr. Hassan .A. Jama

Director, Central Statistics Department