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An economist, Prof. Bright Eregha, has urged the Federal and State Governments to maintain fiscal discipline and support import substitution as measures to combat rising inflation.
Eregha, a lecturer in the Economics Department at Pan-Atlantic University, stated this during an interview with the News Agency of Nigeria in Lagos on Monday.
He noted that over the past year, allocations from the Federal Accounts Allocation Committee to subnational governments had increased significantly due to the economic reforms implemented by the government.
Eregha explained that this increase in allocations has expanded the money supply in the economy.
According to him, if these funds are not channelled into productive sectors, they could exacerbate the current inflation rate.
He stressed the need for governments to invest in mechanised agriculture to address prevailing food insecurity.
“Increased budgetary allocation to mechanised agriculture is essential to boost food production, regardless of whether it is harvest season or not,” he stated.
Eregha argued that such investments would help the country achieve self-sufficiency in food production and mitigate food-induced inflation.
Similarly, a senior lecturer in the Economics Department at the University of Lagos, Prof. Tunde Adeoye, advocated for import substitution as a strategy to reduce inflation.
He stated, “The government should adopt macroeconomic policies that encourage indigenous companies to begin producing imported items locally and ensure these products are patronised by Nigerians.
“This will strengthen local capacity and gradually reduce the volume of imports, which is putting immense pressure on our foreign exchange.”
According to Adeoye, the rising inflation rate is more of a structural issue within the economy.
He said, “The situation has gone beyond the Central Bank’s belief that raising interest rates alone will curb inflation.
“Our rising inflation is more of an economic dislocation, worsened by the government’s current economic reforms.”
Adeoye further highlighted the need for innovative measures to address the security challenges that hinder food production in the country.
“Resolving the persistent herders-farmers disputes in food-producing states could significantly improve the situation,” Adeoye said.
According to the National Bureau of Statistics, Nigeria’s inflation rate rose to 34.6 per cent in November, up from 33.8 per cent in October.
The latest Consumer Price Index report, released on 16 December, revealed a 0.72 per cent increase in inflation within a month.
The NBS also reported a significant year-on-year rise of 6.4 per cent compared to the 28.2 per cent inflation rate recorded in November 2023.
On a month-on-month basis, inflation rose by 2.638 per cent in November, showing a slight drop of 0.002 percentage points from October’s 2.64 per cent.
(NAN)
