Amid 20.77% Inflation, Osinbajo Seeks Synergy Between Fiscal, Monetary Policy

With Nigeria’s inflation rate hitting a new high of 20.77 per cent in September, Vice President Yemi Osinbajo has again spoken on the need for an effective synergy between the Fiscal and Monetary aspects of Nigeria’s economy and how to better manage the country’s foreign exchange rate.

He spoke this morning at the Buhari Administration’s Ministerial Retreat declared open by President Muhammadu Buhari at the Statehouse Conference Center at the Presidential Villa, Abuja.

This is as data released by the National Bureau of Statistics (NBS) showed that inflation rate, which measures the level of increase in prices of goods and services, rose to 20.77 per cent in the month of September, compared to 20.52 which was recorded in August.

According to a statement by his media aide, Laolu Akande, the annual retreat is being attended by all ministers and heads of agencies and parastatals.

In his presentation entitled ‘The Buhari Administration: Reflections on the Journey So far, the VP who detailed some of the game changing achievements of the federal government, said there some areas of concern in the economy.

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According to him, “The first is the synergy between fiscal and monetary policy. The failure of that synergy has led to unnecessary drawbacks in our economic performance and planning. What imports are eligible for foreign exchange must agree with the fiscal ambitions for manufacturing and industry.”

Currently, such decisions on import eligibility for foreign exchange, for instance, is being taken solely by the monetary arm, although fiscal arm would normally be expected to lead in such matters.

Continuing, the VP also said, “Our exchange rate management continues to be an issue.  The exchange rate of the naira to convertible currencies continues to face significant downward pressure because demand substantially outstrips supply.

“That is just the reality. On one hand we have tried demand management and rationing, which has not really worked because fixing the price while the parallel market reveals a massive arbitrage merely creates the opportunity for massive rents.