An analysis of the Sierra Leone Consumer Price Index

Nabbie Bangura’s doctoral thesis, titled “An Analysis of the Sierra Leone Consumer Price Index (SLCPI 2008 to 2022),” provides an in-depth examination of the Consumer Price Index (CPI) in Sierra Leone over a 14-year period. The research focuses on the CPI’s significance as a primary measure of inflation, which is crucial for understanding economic conditions and guiding monetary policy.

The thesis begins by outlining the methodology used to calculate the CPI, which involves a fixed basket of 400 goods and services that are commonly consumed by urban residents. This basket was revised from a previous count of 251 items, reflecting changes in consumption patterns. The data collection process is detailed, noting that prices for 64 of these items are collected weekly, while others are gathered monthly, quarterly, or annually, depending on price variability. The CPI is computed as a weighted average of various sub-indices, with expenditure weights derived from the 2017/2018 Sierra Leone Integrated Household Survey.

Bangura emphasizes the importance of the CPI in monitoring inflation on both monthly and annual bases, as published by Statistics Sierra Leone. The CPI serves as a critical indicator for policymakers, particularly the Bank of Sierra Leone, which aims to maintain price stability and control inflation. The research highlights the challenges posed by high inflation rates, which can adversely affect economic performance and household welfare, especially for low-income populations.

The thesis also discusses the geographical representation of the CPI, with data collected from major urban centers, including Freetown, Bo, Kenema, Makeni, and Koidu. These towns collectively account for a significant portion of urban household consumption expenditure in the country. The analysis includes a review of the Classification of Individual Consumption by Purpose (COICOP), which categorizes the CPI into 12 functions, providing a structured approach to understanding consumer behavior and expenditure patterns.

Throughout the thesis, Bangura underscores the necessity of producing reliable and accurate CPI data to inform economic policy decisions. The research contributes to the broader understanding of inflation dynamics in Sierra Leone and offers insights into the implications of CPI fluctuations for the welfare of the population. Overall, the thesis serves as a valuable resource for economists, policymakers, and researchers interested in the economic landscape of Sierra Leone and the role of consumer price indices in shaping economic outcomes.