NAN-HE-13
Inflation
By Chinyere Joel-Nwokeoma
Lagos, March 15, 2017 (NAN) Some financial experts on Wednesday urged the Federal Government to ensure strict implementation of the new Economic Recovery Growth Plan (ERGP) to subdue inflationary pressure.
The experts, who gave the advice in an interview with the News Agency of Nigeria (NAN) in Lagos, while reacting to the February inflation figure, further urged tackling infrastructure gaps to ensure sustainable slowdown in inflation.
Dr Uche Uwaleke, the Head of Banking and Finance Department, Nasarawa State University, Keffi told NAN on telephone that implementation of ERGP, which stressed provision of basic infrastructure, was paramount in tackling inflation.
Uwaleke told NAN that strict implementation of ERGP would help in subduing the “inflation monster’’.
According to him, ERGP promises to tackle infrastructure gaps in electricity, transport, housing, petroleum products and all other key drivers of inflationary pressure.
He said that inflation would likely trend downward in the coming months, especially if oil revenue and foreign reserves continued to improve.
Uwaleke attributed the slowdown in inflation figure in February to the government’s favourable policies on agriculture, complemented by the Central Bank of Nigeria’s (CBN) interventions that rubbed off positively on food prices.
He also said that the development was made possible by improved oil revenue.
“The recent accretion in external reserves made it possible for CBN to improve liquidity in the forex market, with the value of the naira appreciating in the parallel market,’’ he told NAN.
According to him, the development is good news for the capital market, where a lower inflation rate reduces the negative real returns currently offered by the market.
Prof. Sheriffadeen Tella, a Professor of Economics,Olabisi Onabanjo University Ago-Iwoye, Ogun, said that the fall in the inflation rate was due to shift in demand for goods as the prices rose.
Tella further said many people were now more concerned about food and medicare, adding that as such, they had shifted to such demands.
“While the price of food may go up, those of other items will come down.On the average, the rate will go down since the value of those ‘other’ items is higher than that of food.
“Since rain has started, if in the next three months, food products start getting into the market, the inflation rate may reduce further.
“But, if there is continuous shortage of food, relative to demand, the inflation rate may go up again,’’ Tella said.
In another interview, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., Lagos said that the slowdown in inflation rate was good but could be sustained with friendly fiscal and monetary policies.
Omordion further said that there was the need for the review of government policies and change in implementation style to tackle inflation and revamp the economy.
He suggested that bailout should be packaged for some critical sectors to revamp the economy.
“CBN intervention is good but sustainability is a problem that can be resolved through policies to attract inflow of dollars at single exchange rate,’’ Omordion said.
NAN reports that the National Bureau of Statistics (NBS) on March 14, said that inflation rate, for the first time in 15 months, dropped to 17.78 per cent in February from 18.72 per cent in January. (NAN)
JNC/AIB/DUA
Edited by Abdulfatah Babatunde/Dada Ahmed