Economists at the Centre for the Study of Economies of Africa (CSEA), a leading think tank in economic research and consulting services with special focus on Africa, have canvassed the need for the Central Bank of Nigeria (CBN) to introduce monetary measures that could help to mitigate the negative impact of the rising inflation rate on ordinary citizens in the country.
The analysts in the firm’s ‘Nigeria Economic Update Issue 19’ report sourced by our correspondent, recalled that the nation’s consumer price index (CPI) for April 2023 published by the National Bureau of Statistics (NBS), reflected that the inflation rate increased to 22.22 percent from 22.04 percent in March, representing the highest level in 17 years (since 2004.
According to the experts, to combat the rising inflation, the apex bank (CBN) has had to tighten the monetary space, raising the monetary policy rate (MPR) by 650 basis points in the past ten months.
The CSEA analysts reported: “Unfortunately, the inflation rate has, instead, continued to rise, leading to increased cost of living and a steady-falling standard of living, as rising prices of goods and services wither the people’s purchasing powers.
“Furthermore, a higher MPR has failed to curb inflation increase because rising prices are a consequence of supply-side factors such as the surge in production costs due to high energy prices and foreign exchange crisis and shortage in the output level of major commodities like food, which push businesses to adjust prices upward to maintain their margins.
“Even though the most recent increase is small, the pattern of increases in the underlying factors is concerning. For instance, food inflation has reached an all-time high, and prices for other goods like housing, water, power, and apparel are also rising”, they added
To mitigate the crippling impact of the rising general price level in the economy, the experts advised the government to take action to prevent inflation or at least mitigate its impacts.
Specifically, they urged the apex bank on the need to develop social protection programmes to assist the most vulnerable and disadvantaged people, avoid raising the MPR at all costs, and reduce subsidies to lessen the impact on the broader populace.
The CSEA’s analysts maintained that adopting these steps if taken in the right way would aid the public in reducing the effects of ongoing inflationary tensions.
