With headline inflation soaring to an average of 28.92 percent last December, a socio-economic rights group, Centre for Social Justice (CSR) on Tuesday faulted government’s handling of the problem, which has seen most families struggling to survive.
In a reaction to the data in the latest edition of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), the CSJ in a statement by its Lead Director, Eze Onyekpere, said the country’s economic managers must adopt a wholistic approach to improve the economy and decelerate soaring inflation rate.
In the CPI report, which highlights the rate of inflation growth in the economy, the NBS said the headline inflation in December 2023 increased by about 0.72 percent points, from 28.20 percent in November 2023 to about 28.92 percent.
The report said on a year-on-year basis, the headline inflation rate was 7.58 percent points higher than the December 2022 rate of 21.34 percent.
Specifically, the report said food inflation rate for December 2023 was about 33.93 percent on a year-on-year basis, being 10.18 percent points higher when compared to 23.75 percent recorded in December 2022.
The NBS linked the surge in the price of food items to increases in prices of some staple food items like bread and cereals, oil and fat, potatoes, yam and other tubers, fish, meat, fruit, milk, cheese, and egg.
While noting the rising prices as a symptom of the overall negative macroeconomic fundamentals and strong headwinds besetting the Nigerian economy, the CSJ said beyond inflation, the Naira was losing value, with poverty and unemployment increasing in leaps and bounce.
Also, the groups said there have been massive factory closures, increasing insecurity and population growth figures that almost outpaced economic growth.
In addition, it pointed out that the short and medium-term impact of economic reform measures, like fuel subsidy removal and exchange rate unification policy by the present administration, have not been properly articulated and implemented.
“The reforms were not accompanied by an evaluation/projection of their impact on the economy as well as countervailing measures necessary to limit their harsh effects on prices and other macroeconomic indicators.
“It is therefore imperative that Nigeria’s economic managers adopt a wholistic approach to improving the economy/decelerate inflation,” CSJ said.
These recommendations, the Centre said, should include increased productivity, especially in the tradable and export-oriented sectors (including oil and gas as well as removing export trade barriers in the agriculture sector in the short run) can shore up the country’s foreign exchange earnings to improve the value for the Naira against major international currencies and limit import induced inflation.
Other recommendations include Improving security of lives and property through the right political will that guarantees value for money in the provision of security services in Nigeria.
CSJ recalled that security was given the highest budgetary allocations at the federal level in the last ten years, adding that this would also improve agriculture’s contribution to the gross domestic product (GDP) and food production, thereby limiting food inflation, which has been the major driver of inflation over the last one year.
The Centre said improved security would further lead to increased oil and gas production for export and local refining.
Urging the government to limit ways and means funding of the federal budget to the statutory limit of not more than 5 percent of previous years’ actual revenue in accordance with Section 38 of the Central Bank of Nigeria’s Act 2007, the CSJ said implementing a Nigeria First Local Content Policy in Federal and State Public Procurement would ensure that capital budget implementation do not put undue pressure on the Naira.
Rather, capital budget implementation, the Centre said, should create jobs, enhance local productivity and grow the economy.
Government should also stop denying Nigerians access to their money, vis cash in banks as a means of mopping up what is considered excess liquidity.
This, it pointed out, was a fundamentally flawed measure for the reduction of inflation.
