The March 2021 inflation figures released by the National Bureau of Statistics (NBS) should give Nigerians cause to worry about the future of the country’s economy, a socio-economic rights group,
Centre for Social Justice (CSJ) has said.
The NBS report showed that the country’s inflation rate spiralled from 17.33 percent in February to hit a four year high at 18.17 percent in March.
Also, the NBS report showed that food inflation grew from 21.79 percent in the previous
month to 22.95 percent in March. Lead Director, CENSOJ, Eze Onyekpere, said it was regrettable that the Consumer Price Index Report of the Statistics agency was showing a consistent spiraling inflation, indicating a persistent trend over the last six months.
“We are particularly worried that this is coming at a time all the macroeconomic indicators are headed south.
“These include the unemployment rate in excess of 33%, a depreciated national currency, an unfavourable balance of trade, unsustainable revenue-to-debt ratio and reduced
household consumption expenditure.
“Coming against the background of Nigeria being the poverty capital of the world, food inflation as the major driver of inflation is a major threat to the right to food of the majority, especially in terms of economic accessibility of adequate
“This development, to a great extent, could be traced to the pervading insecurity across the length and breadth of Nigeria. Unfortunately, the President of Nigeria,
Muhammad Buhari, has not demonstrated sufficient political will to bring the insecurity to
“Under the watch of the President, farmers have been killed, maimed, raped and displaced from their lands by terrorists operating as herders.
“Also, agro-climatic conditions may have also contributed to the pressure on food prices. But this would have
been better managed if the insecurity is brought under control.
“The increasing inflation is not surprising for a nation which, to a great extent, depends on
imports, while exporting very little, with a currency that has come under intense pressure and devaluation in the last couple of years.
“The imports are bound to be highly priced on the basis of the exchange rate used in importing them,” .
Taking a swipe on the government for certain policy decisions on the economy, Onyekpere said “when a government takes deficit financing through ways and means to a
ridiculous extent as witnessed under the current dispensation and continues minting new currency not backed by value, we are bound to witness this meteoric inflationary trend.
He said certain decisions by the present administration contravene the Central Bank of Nigeria Act, which permits the CBN to fund the Federal Government by not more than 5 percent of the retained revenue of the previous year.
“In clear violation of the provisions of this Act, the present administration
and the CBN, in an incestuous relationship, have recently provided ways and means funding in excess of 60% of retained revenue.
“Nigeria has outstanding and unrepaid ways and means funding in excess of $25billion.
“Rising inflation at a time of reduced household consumption expenditure portends grave economic danger to the lives and livelihoods of majority of the population and demands
serious governmental action to stem the tide,” he said.
Although the CENSOJ Chief expressed happiness that the price of crude oil, Nigeria’s major export commodity, has regenerated in recent months, he said the major challenge was on the quantum of oil production allowed by the Organization of Petroleum Exporting Countries (OPEC), which runs into millions of barrels per day, coupled with Nigeria’s capacity to meet the production targets.
In its recommendations on how to halt the spiralling inflation and return the economy on a growth trajectory, CSJ urged the government
to take steps to tackle the
problem of insecurity in the country, reduce inflation and achieve accelerated and sustained growth.
“No reasonable development can be achieved without an enabling environment for economic activities to thrive; rethinking the approach to addressing the numerous security challenges bedeviling the country
is of the essence as this will enhance productivity, especially in agriculture and other economic activities will pick up and thus contribute better to the GDP and availability of food.
CENSOJ also called for an articulated local investments in agriculture’s full value chains, while ensuring the
enabling environment to attract more investors into the sector to open up opportunities therein.
With such interventions, CENSOJ said the sector could contribute more to employment, government revenue and foreign exchange earnings.
In addition, CENSOJ recommended an impact evaluation of the various initiatives of the federal government
such as the Anchor Borrowers Programme (ABP) for a proper feedback mechanism to feed into the implementation of agricultural interventions to achieve better results.
Other recommendations include a reduction in ways and means financing to the level provided in the CBN Act; setting up a task team and a national dialogue for revamping the economy, considering that
beyond inflation, all macroeconomic indicators are heading in the wrong direction.
Ths group also wants the government to take steps to improve the productive capacity of the economy, to boost exports, create jobs and enhance foreign exchange earnings; reduce the cost of governance through the implementation of relevant aspects of the Oronsaye Committee report and free up resources to invest in capital expenditure and human development.
The President, CENSOJ said, needs to take practical steps to rally Nigerians to a common cause of national unity as a basis for nation building and economic regeneration.