Nigeria Economic Sustainance (Inflation Trend) By Dr Kenny Odugbemi
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| Nigeria Economic Sustainance (Inflation Trend) |
Economic vitals
*CBN target 21.4%
Feb 2024
✓Headline inflation 31.7%,YoY -9.79%,MoM-1.8%
✓Food inflation 37.92%,YoY-13.5%,MoM 1.8©
✓Core inflation -25.1%
✓MPR-impact domestic demañd pull inflation
✓Fiscal policy has potential to resolve structural supply push inflation
✓Modulating exchange rate fully attenuated will resolve import dependent inflation
✓100million of people in francophone countries has potential to cause domestic pull inflation
Perculiarities
*In francophone countries average core inflation remain at 2%, with relatively stable currency bankrolled by 80% of thier reserve
Nigeria economic status
Nigeria currency is further devalued by 80% due to thier trade impact causing demand pull syndrome, this structural impact can not be addressed by Ecowas treaty because we need additional FX inflow to shore our reserve
Way forward
✓We need to get additional FX inflow through African subregion sales of goods and services
✓We need Value addition to attract Tax,VAT and to achieve this ,we need to set up Commodity market exchange board, improve on our procedure,process and best practices in create World class end products that can compete with imported products that they spend thier hard earn dollar on,,this will increase our food iñdex supply,through which we can control money supply with commensurate value we can moderate imported products that will attract as substitute from other highly developed economy ,with our increase cross boarder activities we will cit back on thier importation,which will be our own inflow
✓We must improve on our power infrastructure,whilst Incentivising productive sector but resolving our our present security challenges is sarcocant
Government need to institute zero tolerance with capital punishment as consequence action
Government (Public sector)
The statutory function must be significantly improve around
*Security
*Rule of law
*Enabling ease of doing business and fundamental rights
*Full implementation of annual budget in a pragmatic manner that must lay emphasy on productivity,with improved efficiency
CBN removal of arbitrage window is commendable
*There is need for CBN to drive productivity through management of FX demand
*Emphazy on productivity must enable increased volume of manufacturing
*Power and security must be robust to drive export and minimize import, output must exceed input,whilst export must exceed import
We need to strongly consider licensing model of Connected National Rail service to meet our 1M-Kilometre project
For our Private sectors
We must improve on our efficiency producing less with few input with zero tolerance on waste by adoption AI, Blockchain technology to improve accessibility, reliability and reduce wastes
Conclusion
We need to maintain transparent in both public and private sector with improved accountability index and strong ownership
By
Kenny Odugbemi