Dr Titus Okunronmu, a financial expert, has advised the Central Bank of Nigeria (CBN) to implement efficient fiscal policies to combat inflation.
Okunronmu, a former CBN director, provided the suggestion to the News Agency of Nigeria (NAN) on Monday in Ota, Ogun, ahead of the two-day Monetary Policy Committee (MPC) Meeting.
According to NAN, the MPC will begin a two-day meeting in Abuja today to decide on the essential parameters for tightening the economy.
According to the National Bureau of Statistics, Nigeria’s inflation rate increased to 16.82 per cent in April from 15.92 per cent in March, the highest level in eight months (NBS).
The previous CBN director emphasized the importance of the top bank implementing efficient fiscal policies alongside monetary policy harmonisation in order to lower continuous inflation rates and revitalize the economy.
He observed that if the Federal Government’s budget was in deficit and was being financed by some banking system, inflation was unavoidable.
“There is the need for MPC to do the needful by evolving an efficient fiscal policy with monetary policy since they have the data about what is happening in the economy.
The MPC needs objectivity to proffer the right policy to tackle the problems of the ailing economy and the rising nation’s inflation rate”, he said.
Okunronmu stated that borrowing to support the country’s annual budget was contingent on whether the funds were utilized to fund capital projects or recurrent spending.
The former CBN director urged the federal government to step up measures to ensure that borrowed monies are not misused.
Recall that, the World Bank had earlier noted that, the import restrictions and the Central Bank of Nigeria’s inflexible exchange rate management are the major driving forces behind Nigeria’s food inflation.
The World Bank, based in Washington, stated this in a new biannual report titled Africa’s Pulse.
In part, the report stated, “Rising food prices are the underlying factor behind the surge of headline inflation in Nigeria. Food prices have increased due to import restrictions and a nonflexible exchange rate management.