‘Why Nigeria has high inflation rate LCCI’
Nigeria’s level of inflation remains significantly higher than its peers rising to over 8 per cent in the month of May says president, Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello.
He revealed that the nation’s annual average inflation rate of 8.5 per cent is higher than that of Africa, emerging markets and advanced economies at 5.8 per cent, 6.3 per cent and 1.4 per cent respectively. On the reason for the high inflation rate, he said it is as a result of cost push that includes cost of operation, energy, cost of fund and fiscal regime of government.
Other cost variables according to him includes high tariffs and government spending especially this era of election where there is high movement of funds from one point to the other.
Bello spoke on Wednesday in Lagos at the unveiling of 2014 Second Quarter report on the economy. According to it is worrisome that the nation’s annual average of 7.85 per cent year to date is above the IMF’s projection of 7.3 per cent and those of its peers.
He said though the foreign exchange market has been relatively stable with slight appreciation of the Naira witnessed only at the interbak and Buraeu De Change segments of the markets, the stability notwithstanding, he stressed concerns that increased yields and interest rate in the United States could have negative impact on capital flow into the country.
In his words: ” Again, there is the risk of high domestic liquidity which could exert sustained pressure on both the exchange rate and consumer prices, as well as accentuate the already high demand for foreign exchange, further depleting the country’s external reserves. At this time there is need to acknowledge key risks such as increasing security threats in some parts of the country, expected fiscal spending towards 2015 general elections and associated demand pressure on exchange rate. The implication is that the interest rate would continue to remain high and continue to put pressure on operating costs in the economy.”
The LCCI boss frowned at the depletion of the excess crude account from $38.72 billion in May to $ 37.2 in June, noting that value of a robust reserves lies in the confidence it inspires among investors especially foreign investors and international trading partners.
Further depletion of reserves and the excess crude account could undermine investor’s confidence and could trigger capital with adverse consequences for the economy he added.
He criticised the face of between the CBN and the Bureau De change operators on the recent increase from $20,000 to N35 million deposit with the apex bank. He said: “Of what use is the new policy that intends to lock up N35 million operating capital without bearing interest.
Exposed!! Popular Abuja doctor revealed how men can naturally and permanently cure poor erection, quick ejaculation, small and shameful manhood without side effects. Even if you are hypertensive or diabetic . Stop the use of hard drugs for sex!! It kills!
Elevated blood pressure is not a death sentence. Take control with our proven herbal remedies, break free from high blood pressure, and reduce the risk of heart disease and stroke. CLICK NOW
Advertisement