By NKIRUKA NNOROM
An investment banker, Mr. Wale Oluwo, has said that the best way to tackle the rising rate of inflation in the country is to ensure that the manufacturing sector is repositioned for greater productivity.
According to Oluwo who spoke to Vanguard in his Lagos office, efforts should be made to see that there is enough credit flow to the real sector, adding that it would bolster activity, as well as boost their production capacity.
He noted that the major cause of inflation in Nigeria was that goods and services have not risen to an extent where they exceed the quantum of money in circulation.
Oluwo said, “You have two options if you want to tackle inflation problem. It is either you increase the amount of goods and services in the economy, so that the available money will be chasing more goods or you reduce the money in circulation. CBN is doing the second one and that is not good. You know what? What if inflation goes to 11 per cent today? Are you going to take interest rate to 13 per cent? When are you going to stop?
“They are curing the symptoms; the cause is that goods and services do not exceed money in supply. So, let’s make sure money gets to the people that produce the goods and services so that we have more goods than money in supply.