Some financial experts on Thursday called on the Central Bank of Nigeria (CBN) to continue to stabilise the foreign exchange market to achieve a single digit inflation figure.
They made the call in separate interviews with the News Agency of Nigeria (NAN) in Lagos while reacting to the October inflation rate figure released by the National Bureau of Statistics (NBS) on Nov. 15.
NBS said that inflation rate, measured by the Consumer Price Index (CPI), dropped to 15.91 per cent in October from 15.98 recorded in September.
Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun, said that single digit inflation rate could only be achieved with stable exchange rate and reduction in production cost.
Tella said: “Achieving single digit inflation rate in 2018 depends on cost of production, level of supply by producers and demand, as well as what happens to the exchange rate from now onward.’’
He said that single digit inflation rate could be achieved if there was increased output to meet the demand during Christmas period and the New Year.
Tella also called for quick passage of the 2018 proposed budget and its immediate implementation to boost economic growth.
He said that continuous marginal appreciation of the naira against the dollar and other key currencies, improvement in Gross Domestic Product (GDP) and sluggish growth in demand for forex could result in further decline in inflation rate.
“Interest rates are still high but if the improvement in power supply continues, cost of production can reduce greatly to further bring down the prices,’’ Tella said.
Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said that lower inflation rate for nine consecutive months was a positive development for the stock market and the economy.
Uwaleke said that measures should be sustained to achieve single digit inflation figure being targeted by the apex bank, noting that cost of goods and services remained very high.
“Although food inflation fell slightly from 20.32 per cent in September to 20.31 per cent in October, food prices are still high due to supply shortages caused by low access to fertiliser and insecurity, especially farmers-herdsmen clashes.
“With headline inflation trending downwards since February this year, I have no doubt that, barring any unexpected shock such as sudden drop in crude oil prices, increase in pump price of fuel or electricity tariffs, the single digit target of the CBN will likely be met,” he said.
Mr Ambrose Omordion, Chief Operating Officer, InvestData Ltd., linked decline in inflation rate to CBN intervention policies and relative stable exchange rate that boosted local production.
Omordion said that the positive economic recovery indices needed strong fiscal policies to support recovery and growth momentum.
He said that the Federal Government needed to provide an enabling business environment and policies that would encourage private sector partnership to drive economic growth.