LAGOS – Nigeria’s inflation rate hit a 17-year-old high of 19.64 percent in July, thus generating anxiety among analysts who have expressed dissatisfaction with the Federal Government’s response to the situation.
Chief Martins Onovo, an engineer and the 2015 Presidential Candidate of the National Conscience Party (NCP), in his reaction, said the Buhari regime is not capable of controlling the current hyper-inflationary trend.
Onovo, currently the Head, Policy Positions, Movement for Fundamental Change (MFC), said the government is incompetent and completely corrupt and, therefore, cannot hold down the inflationary rate.
Onovo said: “It (FG) has failed in all its principal duties and activities. It has failed even in the primary purpose of government which is the security and welfare of the people.
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“From its failure in all its principal duties, we can conclude that, it is not capable of controlling the current hyper-inflationary trend.
“The current hyper-inflationary trend is the result of many issues that could have been better managed by a patriotic and competent government.
“These issues include insecurity, importation of petroleum products, national productivity decline, unprecedented corruption, mediocrity, fiscal indiscipline, reckless borrowings and naira devaluation.
“These issues are inter-connected and can easily be managed by a responsible and competent government.
“If we control insecurity and terrorism, farmers can continue farming and boost agricultural productivity. If we control corruption, we will have resources to improve national infrastructure that is critical to national productivity.
“If we fix our four refineries we will stop importation of petroleum products and save the associated FOREX and thereby defend our Naira. You can see that it is routine to control the hyper-inflationary trend but an irresponsible, incompetent and corrupt government is not capable of these routine tasks.”
On what could possibly happen if the Federal Government is not capable of holding down the inflation rate, Onovo insisted that as long as Buhari remained in office, “inflation will get worse, insecurity will get worse, unemployment will get worse, corruption will get worse, the Naira will be further devalued and national debt will get worse”.
Chief Emeka Charles Kalu, another engineer and chieftain of the Peoples Democratic Party (PDP), maintained that inflation in every political economy is one of the major reasons that hampers development, fiscal stability and national income flow.
According to him, national income accounting is likely to be adversely affected in the face of skyrocketing inflation.
Kalu, National Coordinator, Peoples Democratic Party Coalition (PDPCO), said: “When we talk about inflation, it has to do with rising prices of goods and services, with no corresponding cash availability to sustain the price changes.
“Today, prices of essential commodities have risen to the extent that an average Nigerian cannot afford two square meals per day.
“The value of money is what money can buy and once prices are affected without actual flow of money, the citizens are bound to suffer piles of hardship considering that 85% of the citizens are going to be affected in their daily income.”
Kalu, Director General, Global Initiative for Good Governance (GIGG), stated: “On side of the Federal Government’s capability to tackle the disturbing inflation, it is achievable only if the government reduces its rate of expenditures and blocks loopholes for careless spending.
“To get this actualised, the government in its discretion is expected to reduce tax imposition on imports. We all know that Nigeria is not a self-sufficient nation because it still depends on getting most of the consumables from foreign countries and too much imposition of tax on those imported goods always leads to increase in their prices.”
He added: “With the high rate of increase in prices of goods and services, the national economy would be adversely affected.
“As each unit of the currency could only buy a few goods and services due to price increase, then the purchasing value of money is consequently reduced and this is caused by inflation.”
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On his part, Prof John Ebhomien, an All Progressives Congress (APC) chieftain and former Consultant to the United Nations Office of Project Services, maintained that the Federal Government is capable of handling the inflation rate in the country if appropriate mechanisms are put in place to reduce the rate of inflation which, he noted, has gone haywire.
He said the government could do this by rejigging its fiscal policy measures and monetary policies.
Prof. Ebhomien, also former World Bank/International Monetary Fund (IMF) economist and financial management expert: “They should beam the searchlight on the interest rate to reduce the interest on borrowing money from the banks so as to attract investors and the manufacturing sectors.
“The Monetary Policy Committee (MPC) should ensure that they put their house in order and work assiduously to address the issue of the exchange rate which has gone up astronomically.
“The difference between the black market and the official rate, which is too much, should be reduced. The fiscal policy should be favourable to the importers and exporters.
“The Excise duty on automobiles should be reduced. The excise duty on textiles materials should be increased. The excise duties on consumables, beverages, liquor, should be increased to encourage the local industries.”
