Financial experts on Tuesday urged the Federal Government and economic managers to harmonise monetary and fiscal policies in order to stem the country’s inflation, which they attributed to the border closure.
They spoke with the News Agency of Nigeria (NAN), while reacting to October inflation figure released by the National Bureau of Statisitics (NBS).
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said that monetary and fiscal policies must be realigned to achieve desired interest.
Kurfi said that the two policies needed to complement each other rather than work across each other.
He said that government should implement policies that would support the Central Bank of Nigeria (CBN) desire to bring down interest rate.
Kurfi stated that the spike in inflation figure was due to increase in the price of food items caused by border closure.
He noted that implementation of the new minimum wage would also lead to increase in inflation for the rest of the year.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., attributed the current inflation rate to mix up in fiscal and monetary policies.
Omordion said that closure of land borders without adequate preparation and low harvest due to heavy rains contributed to rise in inflation figure.
He noted that rising demand for goods and services ahead of festive season and the sharp drop in interest rate would further boost purchasing power and consumption, thereby pushing inflation high.
“To curtail the rising inflation rate, the government and its economic managers should rethink on border closure and implement policies that will stimulate economic productivity and growth.
Also speaking, Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, attributed increase in inflation rate to the border closure.
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Tella stated the border closure affected the prices of other commodities.
“We have yet to reach harvesting period; therefore, the price of other food items will also rise until when we start harvesting what has been produced,” he said.
Tella said that prices of food, particularly rice, had continued to rise, thereby affecting other staple food.
NAN reports that NBS on Nov. 18 released the Consumer Price Index, which measures inflation, with the index rising to 11.61 per cent in October.
The NBS in its report said the 11.61 per cent was 0.36 percentage points higher than the 11.24 per cent recorded in September.
An analysis of the report showed this to be the highest inflation rate recorded by the country in the last 17 months.
The last time Nigeria’s inflation was as high as 11.61 per cent was in May 2018.