Prof. Ben Aigbokhan, the Vice-Chancellor (VC), Samuel Adegboyega University, Edo, has advised the Federal Government to increase domestic production to address the double digit inflation rate.
Aigbokhan gave the advice in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
The don, while reacting to December 2016 Inflation report, said domestic production was the solution to the economic crisis.
According to the National Bureau of Statistics (NBS), the Consumer Price Index (CPI) increased to 18.55 per cent (year-on-year) in December 2016 from 18.48 per cent recorded in November.
The CPI, which measures inflation, is 0.07 per cent points higher from the points recorded in November.
Aigbokhan, who is also the President of Nigerian Economic Society, said increased domestic production would result in increased supply and that would make the prices of commodities to fall.
“Increase in domestic production is the solution but the problem is that some of these productions need foreign inputs; they need to import goods to increase output.
“If we produce local rice, wheat and other food items, we will not be importing them again.
“How do we increase domestic production and lower the interest rate for people to be able to borrow to invest.
“The current interest rate is to strengthen the Naira but it is not helping domestic production.
“Interest rate should not be high as 14 per cent; the CBN has not really taken notice of that,” Aigbokhan said.
NAN reports that the CPI shows that the Food Index rose to 17.39 per cent (year-on-year) in December 2016, up by 0.20 per cent points from 17.19 per cent rate recorded in November.
The report shows that all major food sub-indexes increased, with soft drinks recording the slowest pace of increase at 7.66 per cent (year-on-year) during the month under review.
In addition, the price movements recorded by all Items, except farm produce or Core sub-index, rose by 18.10 per cent (year-on-year) in December.
This amounts to 0.10 per cent points from the 18.20 per cent rate recorded in November. (NAN)