Nigeria may not witness sharp drop in inflation till 2020 ~ Investigation
Apparently it’s only Nigeria , among the developing economies , that still has its interest rates and inflation so high. Why is this so?… Read more:
Until the Central Bank of Nigeria (CBN) agree to revuew uts monetairy policy, the coubtry would never enjoyvthe luxury of a single digit inflation, so stated economists and financialists .
They said there was an assurance by the Monetary Policy Committee (MPC), a baby of the CBN that, if nothing was in to tamper with the rusing inflation trend, which witnessed an all time high of 17.5 per cent on December 2016, before the end of second quarter of 2017, it would come downtown about 12 and 14 per cent.
But the report of the National Bureau of Statistics (NBS) for June 2017 recorded that national inflation stood at 16.1 per cent.
Indications are that til 2020, Nigeria may not enjoy single inflation digit, unlike other countries
The worst is that the food price inflation index, for June, was 0.64 per cent higher than the figure in May , having jumped from 19.27 to 19.91 per cent jump.
Dr. Solomon Ezomon, of the School of Business Studies, University of Lagos, said management of inflationary trend is a hallmark of vibrancy and growth of an economy.
“Inflation serves as the yardstich in measuring the ability of the government policy and its penetration to the man on the street, who actually reflects the real economic growth.
There are countries, which ontgeir own execute some programmes tojerk up the price index all in bud to raise the price ibdex of some commodities, because production is churningbout products at economist cost.”
The senior lecturer described Nigerian economy as lacking the needed drive and which is responsible for the recession to be dragging on intonits second year.
Mr. Cletus Asomuta, the business / legal adviser, Rubis Edge, a marketing outfit said Nigerian policy malingers are mixing up politics with economy.
In his words: “The CBN is not as independent as it ought to be, hence its swallowing the pills from the politicians with regard to not being firm on the question how to manage the two economic growth indexes: inflation and interest rates.
” No investor can trust an economy that has such a high rate of inflation , and which even if you source funds elsewhere from the banking system, the purchasing power of the consumer is eroded by high inflation.
“In South Africa and Ghana, the inflationary trends are 6 and 9 per cent, whereas the major headache of the policy makers in those countries is how to further reduce the rate.”
Another expert, Mr. Rufus Adeyemi, former executive director, IBTC Investment, said Nigerian economy will not be viable until the question of job creation is adequately addressed.
He added that a consumer nation, like Nigeria, solves a high inflation probken only when can create new values from what has been around.
Such is possible , depending on how the number of the unemployed is able to move up the ladder, which provides then the means to patronise consumption of food and services.
All the experts agreed, whi volunterred connrbts agreed that Nigeria is yet to tap its potential from the agricultural sector, as there is no basis for price index of food items to be jumping.
But Mrs. Amina Mohammed, NBS spokesman, said her organisation collates inputs from all segments of the society, process them before coming out with statictical report on the sector and the econony, generally.
“Ours is not to formulate policy , but to monitor trends of such policies and inform the all interested partners , including investors, and the general public; so all questions relating to why things are what they are should be directed to the appropriated quarters, ” she said.
All said and done, the sharp increase in the food price index within one month, from May to June, is still a point of worry to the officials of Ministry of Agriculture, given the claimby Chief Audi Ogbeh, the minister of bumper harvsets in 2017.