A member of President Muhammadu Buhari’s economic advisory team, Bismarck Rewane, has warned that Nigeria’s inflation would continue to rise unless the Central Bank of Nigeria takes certain drastic measures to curtail the trend.
Rewane who disclosed this on Arise TV on Tuesday, said increasing the level of oil output and raising the interest rate will temper the continuous hike in inflation rate which now sits at 16.47% in January against the 15.7% recorded in December.
“What the CBN has to do, because they are the monetary policy authority, is to ensure two things. One, increase the volume of oil put in the market, and two, begin to increase interest rate across the board.
“So those are the factors. There’s no silver bullet that is going to solve the inflation saga at this point.
Rewane, who is the Managing Director of Financial Derivatives Company Limited, said Nigeria’s economy will experience slow growth when the gross domestic product for the first quarter is released by month.
He explained that going forward, there will be some improvement as the CBN has been putting in some work, by devaluing the naira gradually among other things but that won’t slow down in purchasing power.
“We are going to see some increase in interest rate, a slowdown in consumer spending, also the CBN allowed the I&E window rate to drop to N409-N410 so essentially, the exchange rate has devalued to about 4% in the last two weeks, and the parallel market has appreciated all the way to N472
While addressing the issues that contributed to the rise in inflation, Rewane said there are several factors, “money supply growth, Federal Government borrowing from the CBN, the exchange rate, supply shocks and other disruption to the supply chain are going to have an impact,” he added.