•Expresses worry over revenue fixation, arbitrary revenue targets for MDAs

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has urged the Federal Government and the Central Bank to suspend monetary policy tightening and interest rate hikes to reduce business operating costs and rescue the economy. He also urged a reduction in fiscal risks to macroeconomic stability through a reduction in fiscal deficit and deceleration in the growth of public debt.

Reacting to the inflation figures released by the National Bureau of Statistics (NBS) yesterday for December 2024, he said Inflationary pressures continue to be a troubling feature of the Nigerian economy as reflected in the new inflation numbers. He, however, said the increase in headline inflation was marginal at 0.2 per cent compared to November inflation figures, which was more significant.

He predicted that the inflation outlook for 2025 promises to be positive and hinged on a sustained moderation in exchange rate volatility and Improvements in foreign reserves. “Further, there is also the prospect of easing of geopolitical tensions with the inception of the Trump presidency in a few days as well as a strong base effect, given the high inflationary pressures experienced in 2024.”

To encourage further moderation in inflationary pressures, he urged a pause on monetary tightening as well as a pause in interest rate hikes when the CBN meets. He said this will save businesses and give some respite to consumers as inflation figures are rising faster than businesses and Nigerians can cope with.

Further expressing worry over the current fixation of the National Assembly on revenue, especially the arbitrary revenue targets for MDAs, he said the excessive pressure on MDAs to boost revenue and increase internally generated revenue (IGR) has profound inflationary implications.

“The Reality is that such pressures are invariably transmitted to investors in the form of higher fees, levies, penalties, import duties, regulatory charges and so on. These outcomes conflict with government aspirations to boost domestic and foreign investments, curb inflation and create jobs.”

“Revenue targets should be based on empirical studies, absorptive capacity of the economy and due consideration of the wider economic implications. Obsession with revenue would hurt investments, worsen inflationary pressures, aggravate poverty and impede economic growth. There should be a careful balance act between revenue growth aspirations, desire to boost investment and commitment to moderate inflation,” he stated.