NAN-HE-1
Inflation
By Chinyere Joel-Nwokeoma
Lagos, Jan. 16, 2017 (NAN) Some financial experts on Monday called on the Federal Government to find a lasting solution to inadequacy of infrastructure to tame the inflationary pressure in the economy.
The experts spoke to the News Agency of Nigeria (NAN) in reaction to the December inflation rate figure released by the National Bureau of Statistics (NBS).
The figures showed, among other things, that the country’s inflation rose to 18.55 per cent in December from 18.48 per cent in November.
Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, Keffi, said that the government should address power and transport challenges to check inflationary trends fast.
Uwaleke noted that disruption of gas supply due to restiveness in the Niger Delta was a major challenge faced by power generating companies.
He urged the government to urgently address the restiveness through meaningful dialogue with stakeholders.
“In respect of transport infrastructure, emphasis should be on ensuring that government’s counterpart fund is made available for the construction of various rail projects already identified.
“Major federal roads should be handed over to the private sector to build, with the concessionaire allowed to toll the roads and recover investments over a reasonable period of time,” he urged.
He said that the NBS report had shown that the current inflationary pressure was driven more by structural than monetary factors, advising that fiscal rather than monetary measures should be used to tackle it.
According to him, the December inflationary pressure came from rising cost of housing, electricity, clothing and food.
He attributed the rise in cost to increased activities during the festive period.
“These factors, in addition to school fees and other expenses on educational materials would drive up the Consumer Price Index (CPI).
“I see headline inflation climbing down gradually from February, 2017 on the back of marginal improvement in exchange rate from rising oil prices.
“The reduction of custom duties on some critical production inputs by the federal government equally promises to have a moderating effect on the general price level,” Uwaleke added.
Mr Sola Oni, a stockbroker and Chief Executive Officer, SOFUNIX Investment and Communications Ltd., also blamed the rise in inflation rate on increase in prices of goods and services.
“Inflation is one of the variables to be considered in portfolio management,’’ he said, adding that there was the need to hedge investment against inflation to enable a robust return.
Oni told NAN that managers of the economy should focus on investment in infrastructure that would create the much-needed enabling environment for enhanced activities.
He said that investment in infrastructure would enhance productive activities in all sectors of the economy, create employment, and ultimately boost the Gross Domestic Product (GDP).
Meanwhile, a total turnover of 1.12 billion shares worth N9.04 billion were exchanged by investors in 16,482 deals last week.
This was in contrast with 4.32 billion shares valued at N7.38 billion transacted in 9,330 deals in the preceding week.
The financial services industry led the week’s activity chart with 903.69 million shares worth N3.34 billion traded in 9,240 deals.
The conglomerates sector followed with a total of 67.15 million shares valued at N109.01 million achieved in 609 deals.
The third place was occupied by consumer goods industry with a turnover of 59.71 million shares worth N4.002 billion exchanged in 2,686 deals.
The NSE All-Share Index during the period under review increased by 74.54 points or 0.28 per cent to close at 26,325.93 compared with 26,251.39 achieved in the preceding week.
The market capitalisation which opened at N9.032 trillion rose by N26 billion to close at N9.058 trillion.
Market capitalisation appreciated by 0.28% to close the week at 26,325.93 and N9.058 trillion respectively.
Diamond Bank led the gainers’ table in percentage terms, growing by 23.33 per cent or 21k to close at N1.11 per share.
Okomu Oil Palm followed with a gain of 10.21 per cent or N4.10 to close at N44.27, while Sterling Bank appreciated by 10 per cent or 7k to close at 77k per share.
Conversely, Cutix Plc led the losers’ chart in percentage terms, declining by 17.99 per cent or 34k to close at N1.55 per share.
7UP trailed with a loss of 13.64 per cent or N17.60 to close at N111.40, while Caverton dropped by 12.79 per cent or 11k to close at 75k per share. (NAN)
JNC/AO/IGO
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(Edited by Angela Okisor/Ijeoma Popoola)