Inflation Rate Had Increased Marginally In August Due To The Poor Purchasing Power Of Nigerians – Economist

An economist, Dr Dominic Agba, has said more investments in transportation would reverse the marginal increase in the rate of inflation in August, after several months of sustained decline.

Agba, who teaches Economics at Landmark University, OmoArun in Kwara, made the submission in an interview with the News Agency of Nigeria (NAN) on Wednesday in Lagos.

TheElite Times reports that the National Bureau of Statistics (NBS) in its Consumer Price index (CPI) for August indicated that inflation increased to 11.23 per cent (year-on-year) from 11.14 per cent recorded in July.

According to the Bureau, the figure is 0.09 per cent points higher than the rate recorded in July.

The Bureau said the figure represented the first year-on-year rise in inflation following, 18 consecutive disinflation in headline inflation.

“The Federal Government’s rail projects should be extended to more rural communities in the hinterland in order to convey farm produce to urban areas,” he said.

He said more investments in transportation would not only enable farmers convey their produce to markets, but increase the contribution of the sector to the Gross Domestic Product (GDP) and reduce inflation in the long run.

Agba said the inflation rate had increased marginally in August due to the poor purchasing power of Nigerians, after sustained decline for 17 months.

“The purchasing power of an average Nigerian had been very weak, which is responsible for the gradual drop in inflation rates over time.

“A good number of them find it difficult to afford basic commodities in the market,” he said.

The economist said the inflation rates could be managed by the monetary authorities if the interest rate was increased.

“More rates by the monetary authorities to commercial banks will increase the huddles to access funds thereby reducing the temporary rise in the nation’s inflation rate,” he said.

According to Agba, the Federal Government needs to sustain peace in farming communities, saying that the need to sustain peace cannot be over emphasised if food security must be improved upon.


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