Many Nigerians are currently not happy with the level of inflation in the economy, with rising cost of goods tearing workers’ meagre salaries apart.
Unfortunately, Nigeria is not alone in this.
As a result, there is an urgent need to curb this inflation and bring it to a more favourable digit before it destroys the economies of many nations.
Global inflation took the centre stage during discussions at the 2023 Spring Meetings organised by the International Monetary Fund and the World Bank in Washington DC.
Speaking on Nigeria’s situation with inflation, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said the CBN was combatting the inflation nightmare in Nigeria with strong monetary policies.
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Emefiele, explained that the tightening stance of the apex bank, which has been applauded by the IMF, was one of the ways of tackling inflation.
He also called for aggressive efforts in growing revenue and prudential spending to contain the rampaging inflation.
He said: “So, the focus remains that monetary authorities must continue to focus on inflation to bring it down but while they are doing that, they must also keep their eyes on banking systems stability through monitoring, supervision and regulatory frameworks.
“For the fiscal, because of the limited fiscal space, the IMF insists that countries need to reduce their spending but in my case, I would say, if you want to spend, you must grow revenue to be able to spend.
“That’s what you would imagine the politicians don’t want to hear.
“But I think that it’s important that you must raise revenue so that you don’t have yourself constrained in an environment where there is debt and where the conditions are very tight and very limited, where interest rates are very high.
“If interest rates are high, it could create a lot of burden on economies.
“The only option is to expand the revenue base so as to be able to spend,” he explained.
Emefiele reckoned that post-COVID, the global economy was beginning to recover quite aggressively, as interest rates were very low for a sustained period of time.
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He further noted that inflation in Europe and developing economies was also low.
“But unfortunately, as a result of the challenges that came up in 2022, the war in Russia and Ukraine, high interest rates and inflation in the US, the need to raise interest rates and its impact on economies have got us to where we are today,” he added.
On its part, the IMF called on all countries, especially those in the low-income category, to closely align their fiscal and monetary policies to combat inflation and build buffers to absorb unforeseen circumstances.
