Financial experts in the country have called on the Federal Government to harmonise its monetary and fiscal policies in other to tackle the current recession in the country.
Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, Keffi, said that monetary policy was not working chiefly because the economy was facing bigger challenges of recession, adding that there is the need to ease the monetary policy at this time for economic growth.
“I am not surprised that the Consumer Purchasing Index (CPI) has continued to rise in spite of the central bank’s tight monetary policy, there is the need to ease monetary policy at this time to restart economic growth,” Uwaleke said.
Uwaleke said that the key drivers of the inflationary pressure such as high cost of electricity, fuel, housing, clothing, books and foods were outside the control of the apex bank.
According to him, the high interest rate regime encouraged by high monetary policy rate at 14 per cent, in a bid to tame inflation, had neither succeeded in subduing inflation nor led to significant capital inflows.
He said that the high inflation rate would continue to rub off negatively on the stock market because rational investors needed positive returns on their investments.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., Lagos, said that government and its agencies should re-assess their policies.
Omordion said that government should introduce new economic policies and incentives in form of stimulus packages or bailouts for some critical sectors to revive the economy.
He said many companies were closing down due to the current economic challenges thereby leading to high unemployment rate.
The Central Bank of Nigeria manages monetary policies, while the Federal Ministry of Finance manages fiscal policies.