Daily Trust economists to FG: Tackle rising inflation, solve oil sector crisis now

The Daily Trust Board of Economists has urged the federal government to tackle rising inflation rates as the election campaigns intensify while deregulating the oil sector completely to rid the nation of the current fuel crisis.

The call is coming just as the Central Bank of Nigeria (CBN) is set to hold this month’s Monetary Policy Committee (MPC) meeting.

Rising from its first quarter meeting for this year on Saturday, the board expressed concerns over the rising inflation, especially food inflation as it called for strategies that would help in tackling the trend by improving security in farming communities. Also, for the election year, it said there are tendencies for more political spending which could increase inflation.

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“The Board, therefore, tasked the monetary authorities to take certain measures to check such tendencies. The Board also noted the need for mass voter education, so that the electorate will demand for clear economic policy direction from aspirants, when they approach them to seek their votes.”

The board was worried about funding the 2022 budget with the suspension of implementation of the Petroleum Industry Act (PIA) with another N3 trillion for subsidy. It said the government should embark on mass public enlightenment on the need to cut the subsidy as a means of saving to improve the health and education systems.

It also called for refining crude in Nigeria with the government adding investment in the Dangote refinery beyond the existing 20% stake so it can begin operation by December 2022, while subsidy removal kicks in January 2023 or by ensuring existing government-owned refineries become functional in December.

The board noted the appreciable growth in Gross Domestic Product (GDP) in the 4th quarter 2021 with the non-oil sector, especially agriculture, trade and ICT driving the growth rate through the informal economy.

It then urged the federal and subnational governments to increase the intervention of discounting registration of businesses or making it free to boost the formal sector and expanding the tax net for more revenue to service debt and deliver social services.

It added: “The Federal Government should accelerate efforts to enhance power supply and access to cheaper energy for our industries, especially through the AKK Gas Pipeline Project, as well as other efforts to enhance infrastructure,” while fully opening the borders for transborder trade.

As funding for some transport projects are stalling especially from China, the Board stressed the need for the government to further explore the use of the Sukuk Bond to fund some of the road projects while advising that the government leverage on Public Private Partnerships (PPPs) for funding of all infrastructure projects including transportation just like in India and Brazil.

For the 2022 Population Census, the Board “emphasised that conducting census in an election year is sensitive, and that it should make the measures transparent and inclusive by carrying along CSO and other stakeholders while leveraging on software advancement to enhance the credibility of the exercise.”