Moghalu schools Nigerian govt on inflation, productive economy

Kingsley Moghalu, a former Deputy Governor of Central Bank of Nigeria (CBN), on Tuesday, schoooled the Federal Government on ultra-effective methods to combat the inflationary crisis plaguing the country.

It was reported that Nigeria’s inflation rate surged to 20.77% in September 2022, up from 20.52% recorded in the previous month, while the food inflation rate in September 2022 was 23.34% on a year-on-year basis, marking an uptick from the 23.12% recorded in the last month.

The increase in the country’s inflation rate, according to National Bureau of Statistics, was not unconnected to the disruption in the supply of food products, the rise in import cost due to depreciating currency as well as the general increase in the price of production.

This was evident in the way the Nigerian exchange rate has crashed to N755/$1 against the US dollar on the black market, while the exchange rate between the naira and the US dollar at official window depreciated to N441.13/$1.

Moghalu, in a series of tweets blamed the crisis of inflation on continuous depreciation of the naira in the parallel market, and charged the Federal Government on building a productive economy.

Read also:Nigerian govt’s response to flooding weak, slow — Moghalu

He condemned the ban on imports, tagging it unnecessary and stressed on the independence of Central Bank in the country.

The tweets read: “A fixed exchange rate that overvalues the naira is artificial because it’s not backed by the value of our exports. It promotes an import economy and leads to dollar scarcity. The constant depreciation of the Naira in the parallel market therefore stokes inflation.

“Nigerian government and Central Bank should obsess less on maintaining an artificial value of our currency and focus on a truly productive economy that exports ever more value-added products. No need to ban imports. It doesn’t work and only creates smuggling. Just use higher tariff rates that make imports expensive, and create incentives for local manufacturers to be more competitive vis a vis imports from China etc.

“The rich can afford imported champagne. The average Nigerian can buy locally produced goods. A Naira that’s bought and sold at natural market prices will also attract massive amounts of foreign currency investment into our country. The combination of such investment and the dollars we earn from exports will eventually strengthen the Naira to its natural value. Multiple exchange rates MUST be abolished for the Naira to thrive.”

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