Central Bank of Nigeria’s (CBN) monetary policy cannot control the nation’s spiraling inflation.
Reacting to the inflation figures released on Monday by the National Bureau of Statistics (NBS), Prof Uche Uwaleke, of Nasarawa State University and President, Association of Capital Market Academics of Nigeria made this observation in Abuja on Monday.
According to Prof. Uwaleke, “since food inflation is the major challenge, it is obviously a supply issue and has gone beyond what the CBN monetary policy can control.”
He was concerned that “food inflation is over 17% and has remained the major driver of inflation even during this harvest season when expectations ordinarily should point to a downward trend.”
He noted that “food inflation in October was highest in Edo, Kogi, and Zamfara and may not be unconnected with insecurity in these parts of the country”.
Consequently, he advised the government to “focus on increasing food production by aggressively implementing the massive agricultural programme contained in the Economic Sustainability Plan”.
Commenting on the new inflation figures which now stand at 14.23 percent, Prof. Uwaleke noted that “contributory factors include the continuous border closure, the increase in VAT and implementation of stamp duty as well as the high exchange rate especially in the parallel market”.
The increase in the pump price of fuel he said also contributed “because according to the NBS, a major cause of core inflation came from an increase in transport cost”.
According to Uwaleke, “with the effect of COVID’19 on the economy still lingering especially from supply chain disruptions, it is no surprise that headline inflation has continued to rise with the NBS October number coming in at 14.23% up from 13.71% the previous month.”