Business
…advises government of what to do to curb inflation
By Victoria Frances
ECONOMIC experts have explained the rationale behind the increase in the inflation rate released by the National Bureau of Statistics, NBS, attributing to the impact of fuel subsidy removal, depreciation of Naira, and poor road infrastructure.
The NBS on Monday, October 16, stated that “In September 2023, the headline inflation rate increased to 26.72% relative to the August 2023 headline inflation rate which was 25.80%. Looking at the movement, the September 2023 headline inflation rate showed an increase of 0.92% points when compared to the August 2023 headline inflation rate.
On a year-on-year basis, NBS said: “The headline inflation rate was 5.94% points higher compared to the rate recorded in September 2022, which was 20.77%. This shows that the headline inflation rate (year-on-year basis) increased in September 2023, when compared to the same month in the preceding year (i.e., September 2022). Furthermore, on a month-on-month basis, the headline inflation rate in September 2023 was 2.10%, which was 1.08% lower than the rate recorded in August 2023 (3.18%). This means that in September 2023, the rate of increase in the average price level was less than the rate of increase in the average price level in August 2023.”
Regarding the September inflation figure released by the NBS, Prof. Uche Uwaleke, President of the Association of Capital Market Academics of Nigeria, said “It is worth noting that whereas inflationary pressure is slowing in many parts of the world including the US, UK, EuroArea, South Africa and even Ghana (where inflation rate is now shy of 40%), it is rising in Nigeria, reflecting impact of the fuel subsidy removal and naira depreciation.”
According to Uwaleke, the pressure point is on food which contributes about 14% (over 50%) of the 26.72%. “This pressure is felt more in the Urban than in rural areas possibly on account of high transport costs.”
The president said: “The trend in the inflation rate is quite worrisome given its impact on the purchasing power of the naira and by extension on the poverty level. It is equally partly to blame for the increasing dollarization of the Nigerian economy and the demand pressure in the forex market.
“In view of the supply-side factors driving inflation in Nigeria including rising cost of transport, energy, flooding and insecurity, the government must play complementary roles to that of the CBN through tackling insecurity, massive investments in power and agriculture in partnership with the private sector as well as ensuring the speedy resuscitation of the refineries in order to bring down the cost of transport as well as help naira appreciation in the forex market when an end is put to import of petroleum products.”
On his part, Bismarck Rewane, chief executive officer of Financial Derivatives Company Limited in an interview with Arise TV, which was monitored by Realnews, said that the rise in inflation was due to bad roads and the increase in the price of diesel. Rewane expects the inflation to rise and moderates later in the year.
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October 17, 2023 @ 5:37 GMT|
Tags: Bismarck Rewane
