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FG Urged To Tame Inflationary Pressure - DAILY TRUST
To tame the current inflationary pressure on the economy, the government has been advised to reform the foreign exchange market in a bid to stabilize the exchange rate and reduce volatility.
The Chief Executive Officer (CEO) of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf in his comment on the September inflation report maintained that inflationary pressures remain a key concern in the country’s economy, both for businesses and the citizens.
According to the National Bureau of Statistics (NBS), headline inflation decelerated by 0.38percent in September from 17.01percent in August to 16.63percent. However, on a month-on-month basis, there was a further increase of 1.15percent between August and September.
Meanwhile, food inflation, which is the biggest worry for the poor, decelerated by 0.73percent from 20.3percent in August to 19.57percent in September.
But on a month-on-month basis, there was an increase of 1.26percent between August and September.
According to Yusuf, the core inflation, which related largely to non-agricultural products, maintained an upward trend. It accelerated by 13.74percent in September as against 13.41percent in August, an increase of 1.24percent, which he said was largely a reflection of the impact of the further depreciation in the naira exchange rate.
He stressed the need to address forex liquidity issues through appropriate policy measures; address the challenge of high transportation costs as well as address the security concerns causing disruption to agricultural activities.
Also, to tame inflationary pressure, Yusuf emphasized the need to reduce fiscal deficit monetization to minimize the incidence of high-powered money in the economy.
He added that concerns around high energy costs must be addressed while an investment-friendly tax environment must be created to further tame inflationary pressure.
“Government must ensure the restoration of normalcy and good order at the nation’s ports to reduce transaction costs as well as reduce import duty on intermediate products and raw materials for industries to reduce production costs, especially in the light of the sharp depreciation in the exchange rate,” he said.
