Some financial analysts have urged the Federal Government to tackle the supply side constraints in the productive sector to further reduce the country’s inflation rate.
They said on Saturday in Lagos that supply-side constraints such as foreign exchange illiquidity, transport and logistics cost, currency depreciation and agriculture-related insecurity and others were the driving forces of inflation.
Mr Titus Okurounmi, a former Director of the Central Bank of Nigeria (CBN), said the supply constraints in the productive sector needed to be addressed to check the inflation rate.
“The constraints of logistics in the productive sector are one of the factors responsible for inflation rise.
“The cost of conveying basic essential from one point to another is on the increase because of the exorbitant diesel prices,” Okurounmi said.
He noted the Federal Government should continue to invest in key infrastructure due to its dominant effect on the economy and ways of easing up inflation rate.
Okurounmi added the insecurity situation must be improved upon, especially in the food basket of the country.
“Enhancing the security is imperative so as to encourage more young people to go into agriculture and boost food output.
“Having undisrupted food supplies might spur the country to achieve food security overtime,” he said.
Also, an economist, Dr Glenn Prince-Abbi, said that the fiscal and the monetary authorities needed to align more to tackle the inflation rate.
Prince-Abbi who is also the Chief Executive Officer, Espera Global Corporation, said the fiscal authorities have to vote more funds to the agriculture sector of the economy.
“Allocating more funds to the agriculture sector and its value chain will turnaround our food supplies coupled with the CBN various Anchor Borrowers scheme intervention.
“ The country’s food-induced inflation rate will begin to abate and self-sufficiency could be realised,” he said.
Prince-Abbi noted that the monetary authorities must ensure that foreign exchange was made available for domestic producers for them to operate with less huddles.
The National Bureau of Statistics (NBS) said inflation rate reduced to 15.99 per cent in October from 16.63 per cent recorded in September 2021.
Its Consumer Price Index October 2021 report data indicated a consecutive seven months clash in inflation rate.