The National Bureau of Statistics (NBS) is currently preparing the Harmonised Consumer Price Index (CPI) for the East African Community (EAC) and Southern African Development Community (SADC), which will determine a list of the final costs paid by consumers for items in a basket of common goods within the region.
According to NBS Acting Director of Population, Census and Social Statistics, Ruth Minja, the harmonised CPI will be prepared according to terms and conditions of EAC as six countries across the region flex their muscles to seal the deal for the EAC Monetary Union protocol. "In preparing the Harmonised Index of Consumer Prices there are regulations guiding all the EAC countries on how to calculate prices of common goods, so that they remain constant from one period to another," she said.
Ms. Minja said that Tanzania was equally doing the same in the SADC bloc, being one the Member countries within the region as well. She insisted that the harmonised Index for Consumer Prices within EAC and SADC countries is expected to be a composite measure of inflation in the regions.
According to Ms. Minja, since every Member State has its development strategic plan based on a particular period, the CPI takes in consumer price inflation data from each member nation and weights them accordingly into an index The CPI index relies on a basket of consumer goods from both rural and urban regions of each nation.
As all Member States eye for the Monetary Union, the Index of Consumer Prices is calculated using the weighted average of the CPI from each country. Each country's CPI measures the change over time in the prices of a basket of goods and services acquired, used or paid for by households within that country.
Therefore, all EAC or SADC countries employ the same harmonized CPI methodology, enabling them to be compared to each other and aggregated to calculate the Monetary Union of Consumer Prices (MUICP).