With Nigeria’s economy experiencing a major surge in its inflation rate, there are major concerns as to its impact on the economy, placing immense pressure on the apex bank to further increase its interest rate. Prior, a report by the National Bureau of Statistics had indicated recurrent rise rate in the month-on-month basis. This has however led to an increase in the prices of food and all other expenditures in the country. The government has also been under immense scrutiny for its failure at solving this recurrent inflation and maintaining a stable progression in the economic position.
Mrs. Zainab Ahmed, the Minister for Finance, Budget and National Planning, at the presentation of the 2022 budget performance with the House of Representatives Committee on Finance voiced her discomfort as regards the 23 percent rise in the country’s inflation rate, whilst also disclosing that the Federal Government was in the process of procuring strategic measures to address the inflation and also ensure decongestion of all ports in the country. She attested that the inflation that has ravaged the economic state of the country was due to a number of components.
The Russia-Ukraine war has affected food production in the country.
Mrs. Ahmed attributed imported inflation as one of the components, pointing to the fact that the situations in developed countries around the globe were a major pointer to the increased state of economic inflation in the country. The Russia-Ukraine war for instance has had a huge impact on so many of the inputs of food production in the country. Mrs. Ahmed also indicated that the decision of the U.S Central Bank and Europe Central Bank also had immense effects on Nigeria’s economy, as we depended hugely on imported goods from these countries.
The rising cost of food in the country was also attributed to the high price of diesel in the country. According to the Minister, the problem of transporting farm products to the market had also caused an increase in the final cost of food products. Mrs. Ahmed disclosed that the Central Bank of Nigeria, on a monetary perspective was also ensuring monetary tightening by mopping up liquidity as a measure for salvaging the inflation. She also stated that President Buhari, after a meeting and authorization of the National Food Security Council to ensure that support is being provided.
Large scanners put in place to hasten clearing process and curb congestion.
The Minister averred that one of the measures being implemented was releasing stocks from the strategic reserves. In addition, she indicated that the government was putting in place measures to support inputs such as the production of fertilizers and feeds. She also disclosed an impending committee meeting, where recommendations would be provided to the president for implementation. On why many Nigerian businesses were importing their goods using Ghanaian ports, the minister noted that the ports in the country were hugely congested.
She noted that many businesses due to this congestion have taken to clearing their goods in neighboring countries and in a bid to salvage this congestion, the Ministry of Finance had put in place, large scanners in three locations to further hasten the clearing process and enhance decongestion in these ports. She again disclosed that the Port Authorities were restructuring the ports to further enhance efficiency in controlling the entry and exit. The Lagos-Abuja rail line was also being extended to Apapa, so that containers can be easily taken out of the Apapa port to ease the congestion.
Ahmed blames oil production shortfall on oil theft.
Mrs. Ahmed, on the 2022 budget performance stated that while 1.6 million barrels of oil was being envisaged for daily production, 1.26 million barrels were being produced and she blamed the shortfall on the oil theft perpetration. She also disclosed that this oil theft perpetration was responsible for the country not benefitting much from the crude oil price hike. Mrs. Ahmed said that though the exchange rate was also fixed at N410 to a dollar but rose to N424 over the cause of the year.
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