Chief Executive Officer of the Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, has said the marginal decline in Nigeria’s headline inflation reflects improved macroeconomic stability.
However, he noted that the high cost of living persists despite the decline in inflation to 14.53 per cent in July from 15.91 per cent in June, according to the National Bureau of Statistics, NBS, Consumer Price Index and inflation report.
Reacting to the NBS data, Yusuf said there was a need for fiscal interventions by governments at all levels to ensure that ordinary Nigerians experienced an improvement in their living conditions.
Yusuf said the marginal decline in the inflation rate could be attributed to sustained macroeconomic stability, particularly the relative stability of the exchange rate.
“Well, the marginal drop in the inflation rate is perhaps a reflection of the sustained macroeconomic stability, particularly around the exchange rate, because imported inflation is a critical component of inflation due to the economy’s high import dependence.
“And the fact that the exchange rate has remained stable and, in a few instances, even slightly appreciated, I think has impacted positively on investment. It has also impacted positively on investors’ confidence.
“And it has also, in a way, lowered inflation expectations. So, for me, I think the principal issue here will have to do with the macroeconomic environment, which I think has been responsible for this.
“But that is not to say that the cost-of-living issues are still not there, because the key drivers of the cost of living are still major pressure points as far as inflationary pressure is concerned.
“I’m talking about food inflation, transportation, energy costs and utilities. Those ones continue to be the driving force.
“Unfortunately, that is an area which impacts a lot on ordinary people.
“That is why the ordinary citizen still continues to be very vulnerable, even with the deceleration or even with the disinflation that we are recording.
“So, there is still a lot of intervention that needs to be done at both the federal and the state government levels to address concerns around food inflation, transportation, energy prices and the cost of utilities.
“And these are really structural factors that require fiscal intervention at both the federal and the state levels,” he told DAILY POST.
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