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Expert cautions on panic measures to stabilise Nigeria’s economy


Abuja -An Abuja-based economist, Mr Henry Eteama, has advised the Federal Government to eschew panic measures in its efforts to stem the inflationary rate in Nigeria.

Eteama told the News Agency of Agency(NAN) in Abuja on Thursday that the Central Bank of Nigeria (CBN) should take sound and realistic fiscal policies to stabilise the economy.

He was reacting to the latest Consumer Price Index (CPI) recently published by the National Bureau of Statistics (NBS), putting the nation’s inflationary rate at 9.2 per cent.

“We need to put in place sound fiscal and monetary policy.

“It is not a panic thing; CBN should not panic; CBN should not rush into actions that will create lack of confidence in investors’ mind.

“CBN should not dance to the banks dictate by looking at exchange rate but use fiscal policy of saying for now, we cannot fund this.

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“ If people are bringing 100 billion dollars in their deposit, let them bring; without that CBN intervention or they (CBN) would have remained neutral the way they were.

The CPI report stated that the 9.2 per cent figure was the same rate at which the index grew in June.

According to the report, “In July, the CPI, which measures inflation, rose by 9.2 per cent (year-on-year), unchanged from the rate recorded in June.

Eteama explained that the inflation rate remained the same but looking at 12 months average, there was a slight increase of 0.1 per cent.

According to him, it means there is good environment within the system because the variation is not too wide.

“If our market is not perfect, you will see a wide margin if we have an environment that is not subject to seasonality like planting period.

“For the fact that it remains the same in June and July, it means there is no variation in the level of inflation.’’

The expert said that the trend in inflation rate had been moving forward since the last quarter of 2014.

He said the trend had moved from the lowest 7.9 per cent in November 2014 and upped by 9.2 per cent in June 2015.

“There is no need for any panic, it is likely that we have reached the peak for now and it is not unlikely that we begin to observe decline, why?

“Because given the current change of government and the capacity to manage the monetary area now, using strong fiscal policy of government.

“It is not unlikely, if the government can fix it right.

“It is not unlikely that we have reached our peak. I don’t foresee a double digit inflation could do what is right; this 9.2, 9.4 per cent now may not reach 9.5 per cent, it will start going down again.’’

However, the CPI stated that the headline index had held at the same rate for the second consecutive month.

The report further stated that it had remained same due to muted rises in the food and non-alcoholic beverages, housing, water, electricity, gas and fuel, among others.

On a monthly basis, the report said the pace of the inflationary rate eased for the second month running, putting the decrease at 0.7 per cent in July, down from 0.9 per cent recorded in June.(NAN)

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