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…FG needs to reverse current economic policy – Expert
After two months of decline, Nigeria’s headline inflation reversed itself, aligning with analysts’ forecasts that inflation in September will rise as headline inflation increased by 0.55% to 32.70% from 32.15%.
All other parameters except core inflation moved in line with the headline inflation. This trend is expected to continue for the next two to three months due to increased PMS prices and the demand for Christmas.
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The latest data puts an end to two months of cool off that saw inflation drop to 32.15 in August.
August’s reduction came on the heels of a 19-month rising streak that peaked at 34.19 in June.
According to the National Bureau of Statistics, the headline inflation rate was 5.98 percent points higher compared to the rate recorded in September 2023 (26.72 percent).
This shows that the Headline inflation rate (year-on-year basis) increased in September 2024 when compared to the same month in the preceding year (i.e., September 2023).
It went on to state that Food inflation was 37.77 percent on a year-on-year basis, 7.13 percent points higher than the rate recorded in September 2023 (30.64 percent).
It noted that the rise in Food inflation was caused by increases in prices of the following items: guinea corn, rice, maize grains, beans, etc (bread and cereals class), yam, water yam, cassava tuber, etc (potatoes, yam & other tubers class), beer (local and foreign) (tobacco class), Lipton, milo, Bournvita, etc (coffee, tea & cocoa class) and vegetable oil, palm oil, etc (oil & fats class).
The Chief Economist with SPM professionals, Paul Alaje, blamed the policy direction of the federal government for the rise as he said it is not right for the type of economy Nigeria has.
While calling for a review of some of the economic policies urgently, he recalled that international organizations were saying the painful policies implemented may not yield tangible results for the next 10 to 15 years even though they supported the policy.
“How amusing. I remember an IMF chief once said in 2016 that our economy was strong and would not enter a recession, but of course, we opposed this assertion and maintained that the economic outlook was weak and would certainly enter a recession. The rest is history; Nigeria’s economy did not only contract but also entered a recession in the year 2016 as we projected.”
“Regarding the current economic situation, we may not come out of this quagmire anytime soon if the floatation policy is still in place and if we don’t change the economic direction to be manufacturing-oriented.” he recommended the blockage of leakages, stop oil theft, encourage investment in oil and gas, recover funds and revenues from mineral resources, boost power and energy supply, cut the cost of governance, and many more.”
Analysts suggest that the increase in the September headline index could be the beginning of a trend due to expectations of an increase in aggregate demand (Christmas and payment of minimum wage) in the coming months
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