Nigeria’s rising inflation amidst downturn in economic activities has been described as quite worrisome.
In a chat with Blueprint on Monday in Abuja, Professor of the Capital Market at the Nasarawa State University, Uche Uwaleke, said it is a stagflation “which further complicates monetary policy against the backdrop of forex market illiquidity and rising unemployment similar to the country’s experience during the 2016-2017 recession.
“This upward inflationary trend is the pass through to commodity prices of increase in VAT and the pump price of fuel, border closure, COVID’19 impact on supply chains and insecurity in the food belt regions of Nigeria.”
In its CPI and Inflation report for July, 2020, the Nigerian Bureau of Statistics (NBS), stated that the consumer price index, (CPI) which measures inflation increased by 12.82 percent (year-on-year) in July 2020, representing 0.26 percent points higher than the rate recorded in June 2020 (12.56) percent.
The report noted that increases were recorded in all COICOP divisions that yielded the Headline index.
On month-on-month basis, the Headline index increased by 1.25 percent in July 2020. This is 0.04 percent rate higher than the rate recorded in June 2020 (1.21) percent.
The former Imo finance commissioner noted that the rising inflation further reflect Nigeria’s high Exchange rate.
To address the situation, Uwaleke explained that “the best way to rein-in the rising inflation is for monetary and fiscal policies to synchronise in addressing the major inflation driver which is the food component that is in excess of 15 per cent.
“On the fiscal side, it is important that the government puts on its fighting gloves to wrestle the incessant bandit attacks on farming communities even if it means overhauling the entire security apparatus,” he said.
