By Merit Ibe
To tame the current inflationary pressure, Centre for the Promotion of Private Enterprise (CPPE), has advocated reform of the foreign exchange market to stabilise the exchange rate and reduce volatility.
The centre also advised that challenges like forex liquidity issues, security concerns causing disruption to agricultural activities, high transportation cost and fiscal deficit monetisation to minimise incidence of high-powered money in the economy, need to be addressed.
The Chief Executive Officer of CPPE, Dr Muda Yusuf, gave the recommendations following the latest report of the National Bureau of Statistics that headline inflation decelerated by 0.38 per cent in September from 17.01 per cent in August to 16.63 per cent.
He noted that although the economy witnessed an incremental deceleration in inflation over the last couple of months, high inflationary pressures remain a major concern to stakeholders.
The economist reeled out the implications of the rise in inflation to include escalation of production and operating costs for businesses, high food prices which impacts adversely on citizens welfare and aggravates poverty, weak purchasing power which poses significant risk to business sustainability and price volatility which undermines investors confidence. He however, recommended that the authorities need to manage climate change consequences to reduce flooding and desertification, ensure restoration of normalcy and order at the nations ports to reduce transaction costs; reduce import duty on intermediate products and raw materials for industries to reduce production costs, especially in the light of the sharp depreciation in the exchange rate; address concerns around high energy cost and create an investment friendly tax environment.