By Lucy Nwachukwu
A don, Dr Charles Nwaekeaku, has said that the progressive decline in inflation rate is heartwarming, but advised the Federal Government to plan more rather than jubilate as the development is temporary.
Nwaekeaku, an Associate Professor at Nassarawa State University, Keffi, gave the advice in an interview with the News Agency of Nigeria (NAN) on Monday in Abuja.
His advice was sequel to June 13, 2018, publication of the Consumer Price Index which showed that inflation rate decreased from 13.34 per cent in April to 11.61 per cent in May (year-on-year).
The NBS statistics showed 16 consecutive reductions in inflation rate since January 2017.
Nwaekeaku, while applauding the rise in the nation’s foreign reserve, however, expressed concern over the corresponding jump in foreign debt.
“The increase in foreign reserve also is heartwarming but at the same time, our foreign debt has gone up.
“Nigeria’s debt is over 13 billion dollars and the debt has been skyrocketing.
“One factor that is responsible for our increased foreign reserve is the increase in oil price in the international market.
“It is not that the country’s productivity has improved; it is not that we have done more exports from other sectors; the major factor is that the oil production has been steady.
“Militants have not been disturbing; so, Nigeria has been producing over two million barrels per day; thus earning more from oil.
“The increase in foreign reserve has brought multiple confidence on our economy and the continued intervention of the CBN on foreign exchange transaction has also helped to stabilise the naira.
He explained that the intervention by the CBN would subsist as long as oil prices remained high but that if the oil production level or its price crashed, “everything will tumble”.
“It will tell on the foreign exchange; it will tell on the foreign reserve; it will have circulatory effect and so there will be a relative decline in the inflation rate.
“ Moreover, this is election year, any moment from now, politicians will start releasing money; all the money they stashed away in private houses and other dormant places will come out.
“And when you have excess liquidity, inflation will come back; so our achievements now is temporary and we should not celebrate but rather use this period to plan because uncertainty hovers within the horizon,’’ Nwaekeaku said.
The don, therefore, advised the government to be wise when borrowing as continued borrowing would only aggravate the economic predicament of the country.
He further urged the government to block all leakages, utilize the country’s internal earnings to enable Nigeria’s economy to pick up.
On security, he advised the government to ensure the provision of adequate security to the citizens in order to provide a conducive environment for businesses to thrive.(NAN)