CPPE Advocates Flexible Monetary Policy Stance to Address Inflation
The Centre for the Promotion of Private Enterprises (CPPE) has advised the Monetary Policy Committee (MPC) to adopt a more flexible monetary policy stance in response to rising inflation.
Its founder, Dr Muda Yusuf, advised in a statement on Wednesday in Lagos, reacting to the April inflation figure of 33.69 per cent. According to him, the MPC needs to pause its monetary tightening measures because of the increase in the April inflation rate.
Yusuf stated that the advice was pertinent to allow businesses to recover from the shocks of the recent bullish rate hikes, while fiscal policy tools are addressed to tackle supply-side factors in the inflation dynamics.
The National Bureau of Statistics (NBS) reported that the April headline inflation rate climbed to 33.69 per cent, up from 33.20 per cent in March. This represents a notable increase of 0.49 per cent and 11.47 per cent when compared to the April 2023 rate of 22.22 per cent.
The CPPE boss noted that the persistent inflationary pressures in the Nigerian economy remained a major cause for concern because of the implications on purchasing power and operating costs for businesses.
He, however, stated that the good news was that the decline in the month-on-month inflation, both for headline inflation and food inflation, though key inflation drivers were yet to significantly moderate.
“These include the naira exchange rate, transportation costs, logistics challenges, insecurity in farming communities and structural bottlenecks to production. These are largely supply-side issues which are being addressed by the fiscal authorities.
“Meanwhile the exchange rate benchmark for the computation of import duty continues to be a major concern to businesses as it has become a major inflation driver. We again urge the Central Bank of Nigeria (CBN) to peg the rate at between N800 and N1,000 per dollar to be reviewed quarterly.
“This is necessary to reduce the pass-through effect of heightening trade cost on inflation,” he said. Oilserv Pledges to Support Nigeria’s Cleaner Energy Transition
