Mixed reactions trail hike in inflation rate to 11.61% in October

Aliya Temilade

Mixed reactions have trailed the ongoing border closure which has led to an increase in prices of goods and services, while shooting up the nation’s inflation to 11.61 per cent in October.

The National Bureau of Statistics (NBS) in its monthly Consumer Price Index (CPI) October 2018 report, stated that the inflation which focuses on the rate of increase in prices of goods and services showed that the October inflation rate represents the highest level in 17 months, since May 2018.

The President, National Association of Nigerian Traders (NANTS) Ken Ukaoha said the border closure which has affected the prices of goods and services and eventually moved inflation up is only momentarily.

“The issue at stake right now with regards to Inflation is a resultant shock in the entire running of the economy as it is an end of the year period. Two things are happening, one is that the 2020 budget is being considered by the parliament as well as the executive and the second is that the economic weather and environment for next year is still not clear.

“Also, the projections for next year are determined by the budget and more so, the economic policy that will be coming into place from next year that carries some policies are tired to the budget and are unpredictable.

“To an extent, the border closure maybe a contributing factor to inflation. However, the impact of the border closure on Nigerians negative is momentarily and if issues surrounding the border closure is addressed, the inflation will drop drastically because of we won’t depend on importation, but rather concentrate on increasing our foreign exchange and import fund.

Similarly, if we look inward both farmers and manufacturers in the production chain will increase productivity to bridge the gap of the goods being imported and employment will be galvanized and the economy will be stronger,” he said

Ukaoha also told Daily Times that it is not completely true that the federal government’s decision for border closure was only due to security reasons rather than economic reasons.

He added that the border closure was both for security and economic reasons as they go hand-in-hand to enhance the security of lives and properties which will guarantee food security.

The NANTs president maintained that since August 30th, when the border was closed, banditry and killings especially in the north-west has reduced drastically.

In contrast, a financial expert and technical assistant to the President of National Association of Small and Medium Enterprises, Chris John Mamuda says inflation will keep being on the rise if measures are not put in place to encourage productivity.

Mamuda said the government closed the borders without putting adequate measures in place to enhance sufficient food production that will cater for Nigeria’s teeming population.

“The encouragement for productivity by the federal government is very low, as such if there is low productivity, it means that economic performance will be very low and that is what is playing out as you can see income available to farmers is very low.

“Our worry is that government policies are not encouraging productivity. We need to have an effective production system so that we can compete in the global market as we target competition with other countries so that we can attract foreign exchange into the economy.

“So as for, inflation will still go up because there is no productivity and the manufacturing sector is in comatose as government has not put police in place for sufficiency in food production,” he said

The financial expert added that government is closing the border not for economic reasons but for security reasons and called on Nigerians to probe the federal government whether they are closing the border to improve food productivity or to reduce insecurity.