Financial experts on Tuesday said the February inflation figure of 17.33 per cent was inevitable due to drop in agriculture production and price hikes in electricity and petroleum.
They spoke with the News Agency of Nigeria (NAN) in Lagos, in reaction to the February inflation figure released by the National Bureau of Statistics (NBS).
Professor of Economics, Sheriffdeen Tella, of Olabisi Onabanjo University, Ago-Iwoye, Ogun State, said that the inflationary trend was expected because production in agricultural sector was falling.
Tella told NAN that production in agricultural sector was dropping due to herdsmen and bandits nefarious activities as well as bad weather.
He said that cost of production in industry was rising as a result of hike in electricity tariff, petroleum products and depreciation of naira.
On the way forward, Tella said that government should take decisive action on the herdsmen and bandits activities now that the rainy season is here.
“Secondly, government should subsidise industries through tax relief, putting a stop to price hikes in electricity and fuel.
“They should also encourage consumption by paying salaries as and when due because production without corresponding consumption will discourage producers from production and expansion, which ultimately promote employment,” he said.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the inflationary pressure in February was largely impacted by higher food prices due to the high cost of transportation, production and insecurity in the north.
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Omordion said that many farmers were driven from their farmlands as a result of insecurity in the north.
He said that government needed to map out policies that would tackle insecurity in the country to boost confidence.
The pump price of fuel and electricity tarrif, according to him, also contributed to the development.
Also, analysts at Cordros Research, said that the figure reflected the effects of persistent conflict between farmers and herdsmen, particularly in the Northern region of the country.
They said that lingering impact of supply chain challenges and foreign exchange devaluation on food prices amid the partial reopening of the land borders contributed to the trend.
NAN reports that the NBS said that the inflation rate increased in February by 0.86 per cent to 17.33 per cent, from 16.47 per cent in January.
The NBS said this in its Consumer Price Index (CPI) report for February 2021 released on Tuesday in Abuja.
The bureau said that CPI increased by 17.33 per cent (year-on-year) in February.
The report said increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the headline index.
“On a month-on-month basis, the headline index increased by 1.54 per cent in February, this is 0.05 per cent rate higher than the rate recorded in January (1.49 per cent),” said the report.