The current rate of inflation in Nigeria, according to the National Bureau of Statistics, rose to 13.22 per cent in August 2020, highest in 29 months, since March 2018. This was contained in the recent Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS).
The latest figure is 0.40 per cent higher than the 12.82 per cent recorded in July, while on a month-on-month basis, the Headline index increased by 1.34 per cent in August 2020.
From 12.1 per cent in January through 12.2 per cent in February to the current 13.22 per cent, there is no gainsaying that Nigeria is having a galloping inflation which, if not arrested fast enough, may spell more doom for the already hapless masses who are groaning under the yoke of economic hardship.
Simple economics states that inflation can occur when prices rise due to increases in production costs, such as raw materials and wages, just as a surge in demand for products and services can cause inflation as consumers are willing to pay more for the product.
It is also common knowledge that inflation can be caused when aggregate demand grows faster than aggregate supply; cost-push; devaluation occasioned by increasing cost of imported goods and also the boost to domestic demand. Inflation is primarily caused by an increase in the money supply that outpaces economic growth.
Unfortunately, all these indices gawked at the Nigerian economy. It is also common knowledge that now the naira costs less and less as the exchange rate collapses, which has resulted in higher import costs and increased inflationary expectations.
Several economists who study the causes of inflation in Nigeria agree that the expected inflation, along with ever-changing exchange rates, heavily influences the inflation.
The attending effects are equally glaring as prices of food and essential commodities are practically out of the reach of the common man who is smarting under the effects of the COVID-19 pandemic.
Apart from the sharp increase in the prices of staples like bread, rice, beans, millet and others, prices of other basics have soared. According to NBS, a closely watched component of the inflation index stood at 16 per cent in August compared to 15.48 per cent recorded in July 2020. On a month-on-month basis, the food sub-index increased by 1.67 per cent in August 2020, up by 0.15 per cent from 1.52 per cent recorded in July 2020.
This rise in the food index was attributed to increase in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, oils and fats, and vegetables.
The inflation is not limited to food as other essentials like cement and other building materials have also climbed.
It is the responsibility of the government to not only provide security of lives and properties but also economic security. No national deserves to be left to the elements and exposed to the vagaries of international and local economic dynamics without potent protection from their sovereignty, which is the government in this case.
Even as we are not unmindful of the devastating effects of the COVID-19 pandemic on the world nay Nigerian economy, we call on the concerned economic agencies and panels to learn from other economies how they are weathering the storm without too much debilitating effects on their citizens.
To protect the average Nigerian, this newspaper believes that more efforts need to be deployed by the appropriate agencies to not only stabilise the naira but strengthen it against the dollar which is the universally accepted means of international trade. The rate the naira is falling against the dollar now is more than alarming; it is scary.
Local manufacturers, in our view, should also enjoy more protection and patronage from the government which should provide a conducive environment for operation and growth by granting them tax reliefs, lower if not zero interest rates even as financial institutions are directed to relax the stringent conditions and terms attached to granting of loans.
Excise duty on essentials needed by local manufacturers should also be reduced considerably or totally abolished for the local industries, which are mostly moribund, to rise again, thrive and prosper.
A hungry man is an angry man, so says the axiom. We commend the federal, state, local governments, conglomerates, non-state actors, including religious bodies and individuals for the palliatives given so far to the struggling Nigerian masses. We, however, state that more could still be done to alleviate their sufferings.
This newspaper also believes that a gradual re-conscientisation of the populace is necessary to, among others, discourage the penchant of the average Nigerian for everything foreign, a state of mind which has consistently drained our foreign reserves and reduce the power of our currency. Nigerians should be encouraged and motivated to think Nigerian, buy Nigerian and consume Nigerian.