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17.24 % inflation rate shows marginal reduction in hardship – economist

Abuja – An economist, Dr Obadiah Mailafia, has said the latest 17.24 per cent inflation figures indicated a marginal reduction in prices of goods and services.

Mailafia, a former Deputy Governor of CBN, told the News Agency of Nigeria (NAN) on Thursday in Abuja that the figures indicated that the rate of inflation was gradually coming down.

Photo: toonpool

He said the figures showed that inflation had reduced marginally from 17.26 per cent in March to 17. 24 per cent in April, saying that“ it a marginal decrease of 0.02 per cent’’.

Mailafia, however, expressed concern over the inflation rate, which he said, was still high as double digit.

“I will like to see the inflation coming to single digit because there were years between 2003 and 2013 when we were able to bring down inflation to single digit.

“I don’t see why we cannot go to that period; inflation is way too high now.

“In advanced industrialised countries, the average rate of inflation is 3.5 per cent, anything higher than that will make people to begin to scream and here we are at 17.24 per cent.

“We would say things are slightly picking up, but it is not yet time to celebrate because inflation generally is too high’’.

Mailafia said the country should be worried about the high inflation, adding that inflation distorted the growth of the economy as well as hampered the welfare of the workers.

The expert said that inflation would hamper the welfare of workers who depended solely on their salaries and it would make them to be poorer, while the rich would gain more.

“The very rich people can translate their assets or property to cash, once inflation comes. In fact, they gain more.

“The workers have fixed income and if inflation wipes it out, it has no recourse; you can see his welfare being reduced to nothing.’’

Mailafia said that the second bad aspect of inflation was that it discouraged savings.

He said people got discouraged to save during inflation because the situation would not help them to justify the act of saving.

“Why do I continue to save while I know that inflation will wipe all my savings and investment; so people begin to speculate, to take more and put it into dollars.

“The more they do it, the more the naira deteriorates and the more inflation you have and people don’t invest and if people don’t invest, growth does not take place.

“ If growth does not take place, you have higher levels of poverty and that is why we must fight inflation to a stand-still.

“We must wrestle the monster of inflation which steals and robs the poor with the little assets they have,’’ the expert said.

NAN reports that the statistics from the National Bureau of Statistics (NBS) in April showed that the inflation was 0.02 per cent lower than the rate recorded in March.

It is the third consecutive month of decline in the headline CPI rate.


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