The World Bank and the International Monetary Fund (IMF) have urged Nigeria’s Central Bank (CBN) to continue its efforts to reduce inflation.
Nigeria’s inflation rate rose to 34.8 percent in December, from 33.6 percent in November.
During a panel discussion, Sameer Matta, the World Bank’s Senior Economist for Nigeria, emphasized the significance of the CBN’s focus on inflation control. “It is vital to maintain current inflation control measures. “The Central Bank must continue to keep inflation under control,” Matta said.
Matta stressed the importance of supply-side improvements, such as increasing agricultural productivity and strengthening links between rural and urban areas.
He also recommended revising trade policies to focus on specific sectors and adjust tariffs as appropriate.
Matta stated that the cost of not adopting reforms is enormous, with fuel and foreign exchange subsidies accounting for two percent of Nigeria’s GDP.
This equates to 5% of GDP, which is extraordinarily high,” he stated.
He also compared the necessary reforms to difficult medical decisions, emphasizing the significance of maintaining social protection measures and speeding up cash transfer programmes to help the most disadvantaged.
Christian Ebeke, Nigeria’s IMF representative, highlighted the need of fiscal and monetary authorities working together to combat inflation successfully.
He praised the central bank and fiscal authorities’ dedication to improving cooperation, which has helped lower inflationary pressures.
Ebeke emphasized the significance of addressing the distributional repercussions of changes, such as the elimination of gasoline subsidies and Naira reforms, in order to safeguard the most disadvantaged communities.
He emphasized the relevance of fiscal policy in supporting monetary efforts, as well as the importance of social safety measures.
He applauded the CBN and fiscal authorities for their efforts to reduce deficit monetisation and improve economic circumstances.
