The World Bank has advised the Federal government to tackle spiralling inflation in the country within the next six and 10 months.
The Bank’s Lead Economist for Nigeria, Dr. Marco Hernandez, spoke during a virtual roundtable organised by the Nigerian-British Chamber of Commerce (NBCC), saying Nigeria should, in the next six to 10 months, bring down the inflation rate; and enhance foreign exchange auctioning process to help investors make sound investment decisions.
According to him, inflation affects the purchasing power of Nigerians. “Right now, Nigeria is growing at a slow rate with a high rate of inflation. About 5.6 million Nigerians have been pushed below poverty line within one year. Inflation is driven by increasing domestic food prices and not imported food prices. Exchange rate reforms are essential to reduce inflation and to boost growth; and inflation follows the movements in the parallel foreign exchange rate,” he said.
Tagged: NBCC Business Advocacy Roundtable, Dr. Hernandez also advised the managers of the economy to look at the connection between trade and inflation; and increase its domestic added values. He also advocated for Nigeria to examine very closely her policy interventions in the areas of exchange rate management, trade, fiscal and monetary policies, and also re-evaluate the issues of social protection.
Hernandez said the country, is at a critical juncture where it must take critical decisions to act.
He said the country cannot continue to operate business as usual, otherwise, “they can only expect the same kind of growth experienced since 2015, which will continue to witness decline in per capita income and limited job creation.”
He said Indonesia that shares similar characteristics as a country took a different policy trajectory and arrived at a different outcome.
“This means that for Nigeria to achieve a more progressive economic growth and development the country must reconsider some of her present monetary policies that will make it possible to achieve expected growth curve. Nigeria would need to create the necessary environment for investment, halt inflation, and create more jobs. Nigeria should take action to halt the declining economy,” he said.
– Media Report