The rising inflation has become worrisome as members of Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) express concern.
The members last month unanimously voted to increase the benchmark interest rate from 13 percent to 14 percent, to address the nation’s rising inflation.
The officials expressed their concerns in their personal statements as contained in the communique of the last CBN MPC meeting held in July.
Nigeria’s inflation rate rose to 19.64 per cent in July, according to the National Bureau of Statistics (NBS).
Driven by skyrocketed food prices, the rate hit its highest since September 2005, a 17-year surge from 18.60 per cent recorded in the previous month.
The CBN committee attributed the development to the disruptions to the global supply chain, tightening global financial conditions as several advanced economies pursue an aggressive regime of monetary policy normalization, declining global trade, and growing risks to financial stability, associated with the burgeoning global private and public debt profile.
Last month, the committee also unanimously voted to increase the benchmark interest rate from 13 per cent to 14 per cent, to address the nation’s rising inflation.
Some members of the committee, however, said the increased interest rate is not enough to tackle the country’s rising inflation.
According to the Deputy Governor, Corporate Services of the bank, Adamu Lametek, the adjustment needed to restore macroeconomic stability carries a huge burden that cannot be borne by the Central Bank or monetary policy alone.
“The structural issues at play are enormous. Those cannot be addressed by monetary policy instruments. I see the need for reform beyond the borders of monetary policy to deliver a holistic recovery in Nigeria and almost everywhere else.
“On the side of monetary policy, I am persuaded that further tightening of monetary conditions would help to address the demand factors underlying the inflationary pressures”.
Another member of the committee and a professor of economics at the University of Ibadan, Adenikinju Festus, expressed concerns about the rising inflation, adding that it remains a threat to investment and output growth.
“Inflation is lowering the real incomes of Nigerians and driving more people to poverty,” he wrote.
“Inflation is hurting many Nigerians, whose nominal wages have remained stagnant for many years. It is dragging down the values of savings, wages, and pensions for retirees. Price stability is a core function of the MPC and hence, the high level of domestic inflation is unacceptable.”
