NECA: Monetary Policy Too Weak To Tame Spiraling Inflation

The Nigerian Employers’ Consultative Association (NECA) has said the Central Bank of Nigeria’s (CBN’s) monetary policy is too weak to significantly reduce inflation.

Speaking on the sideline of NECA’s 61st Annual General Meeting (AGM) in Lagos, the President, Mr. Larry Ettah said the continued existence of stagflation called for a reduction in the cost of borrowing.

Ettah said the government’s 68.50 percent recurrent expenditure as a percentage of total Federal Government expenditure in the 2018 budget is an unhealthy expenditure pattern and an indication that the government is yet to accord infrastructural improvement, the life wire of an economy, the importance it deserves through adequate fiscal support.

He said it was worrisome that for the third consecutive year, the rising cost of debt servicing was in the top three allocations in the budget and, if not checked, debt servicing might soon return to the pre-debt relief period.

He said though the country’s debt level as a percentage of the gross domestic product (GDP) seems in order, it considers the debt to revenue ratio unhealthy and unsustainable.

Ettah said the Federal Government must tame its appetite for debts backed by the World Bank. He pointed out that global bank in its recent Global Economic Prospects Report noted with dismay that the optimism over Nigeria’s economic recovery is tempered by concerns over huge debt servicing obligations and continuous foreign exchange (forex) controls.

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