Some economic experts have said that Nigeria’s rising inflation is difficult to tackle without fixing the foreign exchange crisis and epileptic power situation in the country.
The experts who share the same view on Nigeria’s inflationary pressure said the surge in prices is eroding the purchasing power of the naira thereby dragging many Nigerians into poverty.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprises, Muda Yusuf and Professor of Capital Market, Uche Uwaleke, said this in reaction to the consumer price index report that was released by the National Bureau of Statistics on Monday.
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The NBS in its report estimated headline inflation at 26.7 per cent in September as against 25.8 per cent in August.
Food inflation maintained its upward trend rising to 30.64 per cent in September, the NBS said.
Yusuf however told THE WHISTLER, “It will be very difficult to tame inflation if we do not fix power, logistics and forex. Regrettably, there are no quick fixes in these areas. But it is important to prioritise these issues and drive accelerated progress with the right strategies.”
The CPPE CEO said the persistent inflationary pressures in the Nigerian economy continue to be a major cause for concern, especially because of the acceleration effect on poverty.
He said the effect of inflation is eroding the purchasing power of Nigerians which has continued to fall over the past few months.
Yusuf said, “Economic growth may remain subdued while the risk of stagflation heightens. Key inflation drivers are not receding, if anything, they have become even more intense.
“These factors include the depreciating exchange rate, surging transportation costs, logistics challenges, forex market illiquidity, astronomical hike in diesel cost, climate change, insecurity in farming communities and structural bottlenecks to production.
“Elevated inflationary pressures also aggravate pressure on production costs, weaken profitability, erodes shareholders’ value and dampen investors’ confidence. Not many producers or service providers can transfer cost increases to their consumers.”
Uwaleke in his comment on the matter said the trend in the inflation rate is quite worrisome considering how it is impacting the “purchasing power of the naira and by extension on poverty level.”
He argued that inflation was partly responsible for the increasing dollarisation of the Nigerian economy and the demand pressure in the forex market.
Uwaleke added, “In view of the supply-side factors driving inflation in Nigeria including rising cost of transport, energy, flooding and insecurity, the government must play complementary roles to that of the CBN through tackling insecurity, massive investments in power and agriculture in partnership with the private sector as well as ensuring the speedy resuscitation of the refineries in order to bring down the cost of transport as well as help naira appreciation in the forex market when an end is put to import of petroleum products.”
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