Economic experts have lamented the propensity of rising Nigeria’s inflation as prices of goods and services rose for the 10th time in November to 21.47 from 21.09 per cent in the prior month.
On Thursday, the National Bureau of Statistics, NBS, said the country’s food inflation rate rose to 24.13 per cent compared to 17.21 per cent in 2021.
It stated that on a year-on-year basis, Urban inflation rose to 22.09 per cent in November from 21.63 per cent in October. On the other hand, Rural Inflation stood at 20.88 per cent compared to 20.57 per cent in the prior Month.
NBS attributed the increase in food inflation to a rise in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, Food products n.e.c, and fish.
In a chat with DAILY POST on Thursday, an Accounting and Financial Development don at Lead City University, Ibadan, Prof Godwin Oyedokun, said the persistent increase in Nigeria’s inflation rate indicates that President Muhammadu Buhari’s administration is not doing well in the economy.
He says, “The level of inflation we have today is only obeying the reality in this country; unless the fundamentals change, the rate will continue to increase.
“The rate of inflation is a report sheet of the activities of the government; it shows that the government is not doing what is expected of it. Nobody should compare the rate with that of Ghana; we aren’t the same. We can’t say because ours is 21.47 per cent is a justification of the government’s wrong approach. I pray that our leaders do something quickly to stop the situation from degenerating into that of Ghana. Things are not working as they should; the CBN should bring out urgent solutions”, he said.
Similarly, the former President of the Chartered Institute of Bankers of Nigeria, Prof Segun Ajibola, said the increased inflation is induced by the rising cost of production in Nigeria.
He said, “The high and rising rate of inflation is, in the case of Nigeria, induced by the increasing cost of production, which in economic parlance, is referred to as cost-push inflation.
“Widespread cost affects food, energy, factor inputs, etc. Nigeria also has its share of imported inflation ravaging many economies of the world as of today. Recall that most raw materials and consumer products are imported. The high exchange rate is therefore pressurizing domestic prices. The festive period may not overburden the rate because consumers are not likely to create demand-pull inflation because of the already low purchasing power available”.
On his part, an economist and the chairman of the Chartered Institute of Bankers of Nigeria (CIBN) Abuja branch, Prof. Uche Uwaleke, disclosed that the rising inflation might not have a significant impact on capital and equity markets.
He said fiscal authorities could tackle rising inflation through decentralizing infrastructure provision, private sector involvement in power supply, road transport and adequate security.
On the demand side, Uwaleke stated that the ongoing CBN’s monetary policy on the Naira redesign and cash withdrawal limit might help control inflation.
He said, “The increase in inflation rate for November was expected in line with global trends. The pressure point has consistently been on food, as food inflation has now climbed above 24%. Because financial markets already anticipated this result, it may not significantly impact the equities or fixed-income market.
“What is not in doubt is that inflationary pressure in Nigeria continues to be driven chiefly by supply-side factors such as scarcity of petroleum products, inadequate transport and power infrastructure, as well as insecurity and flooding, which negatively impact food output in particular.
“There’s equally the demand side caused by election spending and speculative demand for forex, especially in the parallel market resulting in naira depreciation and imported inflation.
“The fiscal authorities can only tackle supply-side factors through decentralizing infrastructure provision and involving the private sector more in power and road transport infrastructure provision. The government also has to tackle insecurity which can be addressed in part through the establishment of State Police.
“Demand-side factors are within the purview of the CBN. This, the Bank can do via effective monetary policy, which is geared towards controlling the money supply. To this end, the currency redesign and cash withdrawal limits might help”, he stated.