Experts task CBN on expansionary policies

Some financial experts on Wednesday called on the Central Bank of Nigeria (CBN) to sustain the current economic growth with expansionary monetary and fiscal policies to achieve a single-digit inflation rate.

The experts made the call in interviews with the News Agency of Nigeria (NAN) in Lagos while reacting to the September inflation data.

According to them, expansionary monetary and fiscal policies will make economic recovery faster.

Prof. Sheriffdeen Tella of Economics Department, Olabisi Onabanjo University, Ago-Iwoye, Ogun, said that the fall in inflation rate was due to improvement in production output.

Tella said that the improvement could be sustained with expansionary monetary and fiscal policies.

“The restrictive monetary policy of CBN with high interest rates has not made economic recovery faster, and this needs to be looked into,” Tella added.

He said that the improvement could encourage investors to go for credits in the capital market for business expansion.

The professor added that sourcing of funds for business expansion would make the capital market vibrant and reduce profit-taking attitude of shareholders.

“If things work out this way, inflation rate will continue to fall,” he said.

Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that the Federal Government should roll out stimulus packages for the critical sectors of the economy to drive growth which would help to reduce prices.

Omordion also called for a change in implementation style and disbursement of funds for capital projects to drive economic recovery and growth.

He said that the economy had yet to feel the impact of huge budgets in the last two years.

Omordion said that the CBN should do more than intervention in the foreign exchange market through appropriate monitoring of funds usage, especially for the critical sectors such as power, manufacturing and agriculture.

NAN reports that the nation’s headline inflation declined for the eighth consecutive year-on-year since January 2017, as it eased marginally to 15.98 per cent in September from 16.01 per cent in August.

This is according to the data released by the National Bureau of Statistics on Oct. 17.

The Agency said that increases were recorded in all the divisions of the Classification of Individual Consumption by Purpose (COICOP) that yielded the headline index.

A separate food price index showed inflation at 20.32 per cent in September, up from 20.25 per cent in August.

The agency said that food price pressure continued into September as all major food sub-indexes increased.

“The rise in the index was caused by increases in prices of potatoes, yams and other tubers, milk cheese and eggs, bread and cereals, coffee tea and cocoa, soft drinks, fish, meat and oil and fats,” it said.