Economists in Lagos have suggested diverse ways in which the Federal Government can overcome the rising food prices in the country.
The experts made their opinion known on Monday, in Lagos.
Food inflation rate in Nigeria rose, month-on-month, MoM, to 2.0 percent in April, from 1.62 percent in January, according to the data from Nigeria Bureau of Statistics.
Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, urged government to put a squeeze on credit to the economy by raising rates.
“One of the factors driving inflation is the depreciating value of the naira vis-a-vis other foreign currencies – that is the exchange rate.
“This can be curtailed by putting a squeeze on credit to the economy by raising rates. High cost of foreign exchange enhances cost push inflation.
“Second, the level of uncertainty in the economy hampers production of goods and services. This is fueled by insecurity and election year effects, ” said Nwokoma.
Also, Sheriffdeen Tella, Professor of Economics at the Olabisi Onabanjo University, Ago-Ago-Iwoye, Ogun, advised government to review the macroeconomic policies to promote economic growth through domestic production.
According to him, the current inflation was bad policies induced.
“From the monetary policy side, the financing of budget deficits, particularly financing subsidies by the Central Bank through printing of money while from the fiscal side is rising cost of diesel, electricity and rising consumption taxes.
“These affect cost of production, reduction in demand and output. Reduced output means high unit cost which is passed on to selling price.
“Government has to review the macroeconomic policies to promote economic growth through domestic production,” he said.
On his part, Akpan Ekpo, Professor of Economics and Public Policy at the University of Uyo, Akwa Ibom, said there was the need to take advantage of the war between Russia and Ukraine and encourage farmers to produce grains going forward.
“The present surge in prices is due to many factors: farmers are unable to farm because of insecurity; supply chain constraints, government borrowing through ways and means.
“Distortion in the foreign exchange market, imported inflation because of the Russian-Ukraine war, fiscal rascality of government, among others.
“Inflation adversely affects the poor and pensioners since they cannot draw on savings to survive.
“Government should do its utmost best to solve the insecurity so that farmers can produce optimally; palliatives should be given to the poor including retirees who are merely above the poverty line,” he said.
Ekpo said however, “while I support a managed exchange rate regime, the distortion (gap) between the official and black market rates should be marginal to curtail inflationary pass through.”
