Two financial experts on Friday expressed concerns over the country’s rising inflation rate and urged the Federal Government to revisit the closure of the borders.
They said this in separate interviews with the News Agency of Nigeria (NAN) in Lagos while reacting to the September inflation figure released by the National Bureau of Statistics (NBS) on Thursday.
The Consumer Price Index report released by the NBS said that the nation’s headline inflation rose by 0.49 basis points in September to 13.71 per cent from 13.22 per cent recorded in August.
NAN reports that the current inflation rate is the highest since February 2018.
The report shows that on a month-to-month basis, the headline inflation increased by 1.48 per cent in September, 0.14 per cent rate is higher than the rate recorded in August 2020 (1.34 per cent).
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Mr Sola Oni, a chartered stockbroker and the Chief Executive Officer, Sofunix Investment and Communications, said that the soaring inflation rate in Nigeria calls for concern.
Oni said that the Federal Government through the Central Bank of Nigeria (CBN) needed to urgently tackle the double-digit inflation rate before it goes out of hand.
He called for an implementation of a fiscal policy such as higher income tax to lower spending and inflation.
Oni added that the apex bank could deploy money supply to reduce the high quantum of money in the economy.
“Ordinarily, investment in stocks can serve as a hedge against inflation if the rate is a modest range of between two per cent to five per cent.
“But double digit inflation will make stocks to lose their hedging ability.
“The soaring inflation rate in Nigeria calls for concern,” Oni said.
Also, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that the inflationary pressure in September was largely impacted by higher food prices due to the high cost of transportation, production and insecurity in the north.
Omordion said that many farmers were driven from their farmlands as a result of insecurity in the north.
He also said that the increase in the pump price of fuel and electricity tariffs contributed to the development.
Omordion said that the rising inflation rate had affected returns in the fixed income market and other investment widows.
“This trend is threatening returns on investment and investors need to invest wisely at this period,” he said.
Omordion, however, urged the Federal Government and its economic managers to revisit the border closure.
According to him, the border closure policy of the government is putting pressure on the prices of goods and services in the absence of domestic alternatives.
He disclosed that goods were still being smuggled into the country at higher costs to the end users even with the border closure.
“You cannot close your land borders and hike electricity tariff and pump price of fuel and expect prices to come down.
“All these policies need to be revisited so as to lower interest rate in order to drive economic recovery,” Omordion said.