‘Late signing of budget cannot translate to inflation’
An Economist, Dr Aminu Usman, has said that the delay in the signing of the nation’s 2018 Budget and its late implementation cannot lead to inflation.Usman, who is the Head of Economics Department at the Kaduna State University, said this in an interview with the News Agency of Nigeria in Abuja, yesterday.
The 2018 appropriation bill of N9.12 trillion passed by the National Assembly on May 16, is still awaiting assent of the President.Granted, while the development may not have a direct link to inflation, it is directly associated with distorted economic performance through poor budget performance and lost investment opportunities.
The don said that the implementation of the budget might not begin in earnest till around September given the long procurement process and cumbersome process of capital release.
Umar however, said that inflation was still high in the country in spite of the decrease in the Consumer Price Index (CPI).The National Bureau of Statistics (NBS) says the Consumer Price Index (CPI), which measures inflation for May, decreased to 11.61 per cent (year-on-year) from 13.34 per cent recorded in April.
According to the bureau, this figure is 0.87 per cent points less than the rate recorded in April.The bureau said the figure showed 16 consecutive reductions in inflation rate since January 2017.
“Well, the issue of inflation to me is because prices have risen so high and remained so; that is why when it is measured year-on- year, it shows declining percentage rise.“We are also very fortunate that harvest last year was good, courtesy of stable rains and God’s favour and not any good agriculture policy.
“It may not be the case this year because the rains are not quite encouraging, late into June up North,” Usman said.According to him, the two major sources of inflation in Nigeria are food and imports.He said the exchange rate had been stable for sometime at high rate of about N360 per dollar.
“Prices have already adjusted to the existing exchange rate. Domestic Food supply like I said was robust in 2017 and the prices have also adjusted to market realities,’’ the don said.
Meanwhile, NBS reported that the composite food index dropped to 13.45 per cent in May from 14.80 per cent recorded in April.All items less farm produce or Core inflation, which excluded the prices of volatile agricultural produce stood at 10.7 per cent in May 2018.This, it noted, was down by 0.2 per cent from the rate recorded in April, which was 10.9 per cent. (NAN)
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