CBN’s monetary policy tightening stance is not addressing inflation rate, says Uwaleke

President of the Association of Capital Market Academics in Nigeria (ACMAN), Professor Uche Uwaleke said the monetary policy tightening stance of the Central Bank of Nigeria (CBN) has not addressed the rising inflation rate in Nigeria.

Uwaleke, while reacting to National Bureau of Statistics (NBS) 22.22 per cent inflation rate for the month of April, challenged the Federal Government to come up with complementary fiscal measures aimed at boosting food supply.

“The increase in headline inflation to 22.22 per cent for the month of April did not come as a surprise in view of the rising inflation trend in many economies partly caused by the Russian Ukrainian conflict.

“Be that as it may, the reality is that the Nigerian case has a lot to do with domestic structural factors.

“It’s worth mentioning that the NBS, in its April Consumer Price index report, provided a clue as to the major items driving the inflationary pressure in Nigeria to include food, electricity, housing and transport.

“In the light of this revelation, what becomes clear is that the monetary policy tightening stance of the CBN alone may not address the challenge. The continuous rate hikes embarked upon since May 2022 has not yielded the desired results.

“The government needs to implement complementary fiscal measures aimed at boosting food supply as well as reducing firm’s cost of production occasioned by high cost of energy and transport.

“It is pertinent to note that Inflationary pressure continues to be driven by the food index at over 24per cent reflecting legacy factors such as transport challenges.

“This partly explains why food inflation is reportedly highest in Kogi at over 29per cent and lowest In Sokoto at about 19per cent. a difference of about 10per cent,” he said.

According to him, in order to increase food output and significantly bring down food inflation, the need to tackle the seemingly intractable security challenge facing the country as well as invest more in mechanised agriculture cannot be overemphasised.