Zainab Ahmed, minister of
finance, says the closure of the country’s land borders is contributing to
rising inflation.
Last week, the Nigeria Bureau of
Statistics (NBS) released figures that showed that the consumer price index,
which measures inflation, rose to 11.61% in October, an increase of 0.36
percentage points compared to 11.24% recorded in September.
That was the exact inflation rate
recorded in May 2018 when the country was recovering from the recession and
high inflation rate.
At the end of the federal
executive council meeting on Wednesday, Ahmed told state house correspondents
that inflation rose due to hikes in food prices arising from border closure.
“On inflation, headline inflation
declined every month for several months before we noticed an optic in the last
two months. And now headline inflation is at about 11:61 percent as at the end
of October. The slight increase in this inflation between September and October
is due to food inflation,” she said.
“The food inflation we are
ascribing to prices of cereals, rice and fish. And part of the reason is the
border closure but the border closure is very very short and temporary and the
increase is just about two basis point. Remember there was a time inflation was
nine percent and it grew to about 18 percent in January 2017 when we were in
recession.
“The relationship between
inflation, interest rates and growth is managed by the monetary authorities and
is a management that is tracked on a regular basis.
“So if you reduce interest rate
you expect more borrowing for investments in the real sector. But at the same
time that also has the tendency of reducing money that is used for consumption
on a day to day basis.
So it’s a balance that we
continue to watch on a regular basis, we expect that this will be moderated as
border closure impact fizzles out and also as the monetary authorities continue
to support the MPR rate therefore ensuring that interest rates are not on the
high side.”
Ahmed added that closure of the
border is temporary, highlighting the benefits of closing the borders.
“I need to remind us that the
border closure is temporary. We have really advanced in our discussions between
ourselves and our neigbours. We expect that the outcomes of those discussions
and agreements is that each party will respect the protocols that we all
committed to and then the borders will be open again,” she said.
“What we are doing is important
for our economy. We signed up to the African Continental Free Trade Area
(ACFTA) agreement, we have to make sure that we put in place checks to make
sure that our economy will not be overrun as a result of the coming into effect
of the ACFTA. That is why we have this border closure to return to the
discipline of respecting the protocols that we all committed to.”
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com