The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) has provided valuable advice to the Federal Government (FG) and the Central Bank of Nigeria (CBN) regarding strategies to tackle inflation beyond the conventional approach of raising the Monetary Policy Rate (MPR).
During a media interactive session held in Lagos, Mrs. Funmi Ekundayo, the President/Chairman of Council at ICSAN, highlighted the increasing trend of the CBN raising the MPR multiple times, accumulating a total increase of approximately 225 basis points this year. Despite these efforts, the impact on inflation has been minimal or negligible.
Mrs. Ekundayo stated, "CBN has increased MPR about four times by a total of about 225 basis points. That is huge. But what do we see? Has it had any impact on inflation? I will say no."
She emphasized the necessity for the CBN to explore innovative solutions beyond the traditional methods, as these methods appear to be less effective in addressing the inflation challenges. She further advocated for a holistic approach that includes measures beyond interest rate management to curb inflation effectively.
Mrs. Ekundayo recommended that both the government and CBN focus on areas that can enhance overall economic efficiency. She stressed the significance of increased investment in infrastructure and the need for economic policies that align with Nigeria's unique circumstances and requirements.
In addition, the ICSAN President encouraged the government to address systemic leakages in the financial system that contribute to the rising cost of governance.
She cited excessive salaries and allowances for public office holders, the maintenance of a large number of aides, and the duplication of functions in Ministries, Departments, and Agencies (MDAs) as factors driving up the cost of governance. These factors, she noted, directly impact economic growth and the government's capacity to make meaningful investments.
Mrs. Ekundayo's insights underscore the call for a multifaceted approach to tackling inflation and enhancing economic performance. By diversifying strategies and addressing underlying structural issues, Nigeria can work towards a more resilient and prosperous economy.