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Association of Bureaux De Change Operators of Nigeria, ABCON, has cautioned the Federal Government against policies that can worsen the impact of upward inflationary trend on the populace.

Association gave this warning in its Quarterly Economic Review for the second quarter of the year, Q2’22, noting the severe impact of the sharp rise in commodity prices triggered by the COVID-19 pandemic and the ongoing Russian war in Ukraine. 

“Nigeria needs to balance fiscal sustainability with the need to mitigate the effects of these overlapping crises on the poorest citizens. The excruciating pressure on commodities especially oil and gas globally is not exonerating the poor in Nigeria,” ABCON said.

“Galloping energy prices as currently being witnessed in Nigeria, with lower real incomes, increased production costs, tightened financial conditions, and constrained macroeconomic policy.

“Under these prevailing circumstances, the Government must avoid all distortionary policies such as multiple taxes, subsidies, and all fiscal tightening, which could worsen the recent increase in commodity prices”, the Association added.

Against this background, ABCON called on the FG to cushion reprioritise its spending with emphasis on targeted relief for vulnerable populations, to cushion the impact of higher inflation, weaker economic growth and tighter financial conditions.