Inflation driving Nigerians into different levels of poverty, admits CBN governor

Governor of Central Bank of Nigeria (CBN), Olayemi Cardoso, has admitted that the increasing inflation in the country is pushing Nigerians into different levels of poverty.

Cardoso, who spoke on Tuesday, during a press briefing in Abuja, at the end of the Monetary Policy Committee (MPC) meeting, stressed that controlling the inflation will be in the best interest of Nigerians.

The CBN governor lamented the impact of the inflation on the economy, saying the purchasing power of Nigerians is being significantly eroded.

Cardoso stressed the importance of taming inflation for the average individual and the organised private sector, which faces its own consequences.

He also acknowledged the need for economic growth and the challenges posed by high interest rates imposed to control inflation and ensure the economy’s long-term stability.

“I think I will just say one or two things and these are some of the things that we discuss with the organised private sector that inflation really and truly is having a major impact on our economy,” Cardoso said.

“Purchasing power is getting eroded, people are being pushed into different categories of poverty, and it is in their own interest that we are able to tame the scourge of inflation. If not, the ramifications will also be for them.

“It is not on the average man alone, it will also be for them and we understand the need for growth and we also understand that it is relatively challenging when you have high interest rates.

“My belief is that it is so fundamental to the long-term future and stability of our economy, that inflation should be brought under control.”

According to Cardoso, these short-term pains will eventually benefit the economy and the manufacturing sector.

Speaking on the current economic situation, the CBN governor said the influx of liquidity into the system over a short period played a significant role.

He said the consequences of printing money through ways and means advances are being felt, leading to an out-of-control money supply trajectory.

Cardoso said in response to this, interest rates are being raised to manage the money supply and prevent further spikes.

On Tuesday, MPC raised the monetary policy rate (MPR), which benchmarks interest rates, to 26.75 percent — from 26.25 percent.

Last week, Nigeria’s inflation rate rose to 34.19 percent amid the surge in food prices.

Speaking further, Cardoso said MPC voted to hike the rate by 50 basis points to 26.75 percent, adjust the asymmetric corridor to +500 and -100 basis points around the MPR.

The committee retained the cash reserve ratio (CRR) at 45 percent, and liquidity ratio at 30 percent.