By Merit Ibe
The Centre for Promotion of Private Enterprises (CPPE) has said that implementation of fiscal reforms can help the Federal Government curb the surging rate of inflation in the country and reduce the vulnerabilities in the economy.
Chief Executive Officer of the centre, Dr Muda Yusuf, made the remark following the headline inflation which accelerated to 21.09 per cent as against 20.77 per cent in September.
“However, on a month-on-month assessment, there was a decline of 0.11 per cent in the headline inflation. It declined from 1.36 per cent in September to 1.24 per cent in October.
“Food inflation maintained its upward trajectory, accelerating to 23.72 with a month on month decline of 0.21 per cent. Core inflation similarly spiralled to 17.76 per cent in October.”
With the above trend, Yusuf said evidently, the country was yet to see an abatement to the key factors fueling inflation, which he said are global while others are domestic. “They are a combination of structural and policy issues.”
These factors include the depreciating exchange rate, rising transportation costs, logistics challenges, forex market illiquidity, hike in diesel cost, climate change, insecurity in many farming communities and structural bottlenecks to production.
Yusuf said tackling inflation requires urgent government intervention to address the challenges bedevilling the supply side of the economy, addressing production and productivity constraints, fixing the dysfunctional forex policy and institution of fiscal reforms to curb escalating deficit spending.
“The accelerated growth in fiscal deficit financing by the CBN is heightening liquidity in the economy with consequences for soaring inflation.” He said tackling inflation requires urgent government intervention to address the challenges bedevilling the supply side of the economy, addressing production and productivity constraints, fixing the dysfunctional forex policy and institution of fiscal reforms to curb escalating deficit spending.
“To give producers and citizens some relief, the government could tweak the tariff policies by granting concessionary import duty on intermediate products for industrialists, especially those in the food processing segments of the agriculture value chain.”