Prioritise agric to tame inflation, experts urge FG

 The Federal Government has been urged to prioritise agriculture in order to tame the country’s rising inflation occasioned by insecurity and hike in electricity tariffs.

Financial experts gave the advice on Thursday in Lagos while reacting to March inflation figure released by the National Bureau of Statistics (NBS), which increased by 18.17 per cent (year-on-year) in March.

The Chief Executive Officer, Sofunix Investment and Communications, Mr Sola Oni, said the rising inflation was not unconnected with the naira devaluation, which was due to external shocks in the international oil market.

“Government should tame inflation through diversification of the economy to optimise production and over dependence on income from crude oil.

“This can be possible by investing in agriculture and creating an enabling environment for the SMEs to thrive and create employment opportunities.

“There should be a deliberate policy of investing in infrastructure among others to ease means of doing business.

“Government should align fiscal and monetary policies to attract investment, encourage economic activities and boost the Gross Domestic Product,” Oni said.

Prof. Uche Uwaleke, president, Association of Capital Market Academics of Nigeria, said agriculture should be prioritised with emphasis on mechanised farming for increased output.

Uwaleke said the Central Bank of Nigeria (CBN) should scale up interventions in the agricultural value chain to boost production.

According to him, time has come to take the issue of state police more seriously to tackle insecurity in the country.

He said the Bank of Agriculture should be re-capitalised and partially privatised for it to be more effective.

“The bank was set up to finance agriculture but can’t perform partly due weak capital base.

“Some of the interventions by the CBN should have been by the BOA if it was well capitalised.

“Private sector participation is required to make it more functional,” he said.

Uwaleke noted that food was the critical component exerting the greatest pressure on inflation.

“This may not be unconnected with insecurity in most parts of the country.

“Another thing to note is that inflationary pressure is more in the urban than in rural areas.

“This could be the consequence of poor transport infrastructure and logistics to convey goods from rural to urban areas resulting in high cost of transport made worse by high fuel price.

“The hike in electricity tariffs equally contributes to rising urban inflation,” Uwaleke said.

Speaking on the implications of the rising inflation, he said the 2021 budget target of 11.95 per cent appeared unrealistic.

“The CBN Governor had said the inflation rate would moderate by May this year.

“This is again unlikely in the face of downside risks from likely hike in pump price of fuel as well as depreciation of the naira,” Uwaleke added.

The NBS disclosed in its report on ‘Consumer Price Index’ for March 2021 on Thursday that March inflation rate remained the highest in four years.

The consumer price index, which measures inflation increased by 18.17 per cent (year-on-year) in March.

This is 0.82 per cent points higher than the rate recorded in February (17.33 per cent).

The urban inflation rate increased by 18.76 per cent (year-on-year) in March from 17.92 per cent recorded in February 2021, while the rural inflation rate increased by 17.60 per cent in March from 16.77 per cent in February. (NAN)