million Nigerians are at risk of emergency food and nutritional assistance due to the attendant effects of rising inflation, climate change, among others.
According to the lending bank, inflation is currently pushing many Nigerians into poverty and food insecurity.
The bank also noted that although the CBN was making efforts to curb the rising inflation by increasing interest rates, its funding of fiscal deficit through the ways and means advances had made things difficult.
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The Lagos Chamber of Commerce and Industry recently called on the CBN to explore viable options to tackle the country’s surging inflation as the frequent interest rate hikes were not producing the desired result.
In a statement, the LCCI said, “While the CBN has the overarching mandate of ensuring price stability, we suggest it should not be done in a manner that compromises growth, more especially in the face of high unemployment.
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“Inflation chips away at purchasing power leads to inventory stockpiles, undermines growth, and creates a lot of economic uncertainties. Taming it, however, should not be done at the expense of growth and the most vulnerable sectors.”
The National Vice Chairman of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, recently said that the naira redesign policy which fuelled scarcity of the local currency was responsible for the spike in the country’s inflation rate.
He also faulted the NBS figures, noting that it was inconsistent with what is obtainable in the marketplace.
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Speaking with The PUNCH, former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, noted that there are external and internal factors affecting inflation rate.
He also said the CBN policies were rates contributing significantly to inflation.
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Nzekwe said, “There are external volatilities and internal volatilities causing rising inflation. For external volatilities, the economy is not producing, and the country is importing. The country is importing most of the things produced. That is why we are having this problem. With the Russia-Ukraine war, the country we are importing goods from are also suffering from inflation. So, we are importing inflation too.
“The CBN policies are also contributing to inflation. We have multiple exchange rates. This has encouraged inflation in the country. You cannot run monetary policy like that. It has to be on exchange rate, and I am happy that the new government will abolish the multiple exchange rate.”
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The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, also admitted that the CBN has contributed to the rising inflation through currency devaluation and deficit financing.
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He said, “We need to look at the key drivers and how they have been impacting inflation. Number is our currency. If you look at the change, you will find a correlation between the depreciation of the currency and inflation because of the high import content in what we do.
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“The second is the money supply side, especially this CBN financing of deficit. The rate at which the CBN provided money to the government rose and because worst.”
He also noted that there are other issues like insecurity and climate change, which are beyond the reach of monetary policies.
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“Then we have the problem of insecurity, which affects food inflation. There was also the issue of climate change. Also, the energy cost has been rising over time. These are the key drivers, and it is not something monetary policy only can fix,” Yusuf added.
He advised the new government to examine the key drivers to understand how to manage inflation rate.
Yusuf also urged the government to slow down on borrowing from the CBN through the ways and means advances, adding that the government needs to boost foreign exchange into the country.
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