By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE) has lamented that the continuous increase in inflationary pressure is a troubling feature of the Nigerian economy as reflected in the December Inflation numbers.
The centre noted that though the increase in the December headline inflation was marginal at 0.2% compared with November inflation figures, the inflation outlook for 2025 promises to be positive.
The headline inflation rate in Nigeria experienced a slight increase, reaching 34.80% in December 2024, as reported by the National Bureau of Statistics.
This marks a marginal rise of 0.20% from November 2024’s rate of 34.60%, primarily driven by the increased demand for goods and services during the festive season.
In December 2024, the headline inflation rate of 34.80% was 5.87% higher than the rate recorded in December 2023, which stood at 28.92%.
In his comments, to ensure a further moderation in inflationary pressures, Director, CPPE, Dr Muda Yusuf, recommended pause on monetary policy tightening and interest rate hikes by the CBN to reduce business operating costs.
He also advised reduction in fiscal risks to macroeconomic stability through a reduction in fiscal deficit and deceleration in growth of public debt.
Worried about the current fixation of the National Assembly on revenue, especially the arbitrary revenue targets for MDAs, he pointed out that obsession with revenue would hurt investments, worsen inflationary pressures, aggravate poverty and impede economic growth.
He suggested that there should be a careful balance act between revenue growth aspirations, desire to boost investment and commitment to moderate inflation.
“Excessive pressure on MDAs to boost revenue and increase IGR has profound inflationary implications. Reality is that Such pressures are invariably transmitted to investors in form of higher fees, levies, penalties, import duties, regulatory charges etc.
“These outcomes are in conflict with government aspirations to boost investment, curb inflation and create jobs.
“Revenue targets should be based on empirical studies, absorptive capacity of the economy and due consideration of the wider economic implications. “The CPPE boss is optimistic that the inflation outlook for 2025 promises to be positive for the following reasons: “Sustained Moderation in exchange rate volatility.
“Improvements in foreign reserves. “Prospects of easing geopolitical tensions with the inception of Trump presidency in few days time.
“And a strong base effect, given the high inflationary pressures experienced in 2024.”