A financial expert, Dr Samuel Nzekwe, has advised the Federal Government to redouble its effort in addressing insecurity in the country.
Nzekwe, a former President, Association of National Accountants of Nigeria (ANAN), gave the advice in an interview with the News Agency of Nigeria (NAN), in Ota, Ogun on Saturday.
He spoke while reacting to the Monetary Policy Committee’s (MPC), decision of increasing the Cash Reserve Ratio from 22.5 per cent to 27.5 per cent, after its two-day meeting on Friday, in Abuja.
The MPC also retained the Monetary Policy Rate at 13.5 per cent and Liquidity Ratio at 30 per cent.
It would be recalled that the National Bureau of Statistic (NBS), had on Jan. 17, said that Nigeria’s inflation rate increased from 11.85 per cent in November, to 11.98 per cent in December due to closure of the country’s borders.
The expert noted that tackling security was imperative because the high insecurity in some parts of the country was contributing to the persistent rise in Nigeria’s inflation rate.
“Most of the farmers in the North-eastern part of the country have not been able to farm due to insecurity, and this is affecting the prices of goods.
“The closure of the nation’s borders also contributed to the continuous rise in the country’s inflation rate,“ he said.
Nzekwe noted that the increase in Cash Reserve Ratio (CRR), from 22.5 per cent to 27.5 per cent, would only reduce banks’ funds and make them have less to lend investors thereby reducing money in circulation.
The former ANAN boss stressed the need to combine Monetary and Fiscal Policies; as well as tackle insecurity to ensure a drastic reduction in inflation.
He also called on the Federal Government to create an enabling environment by providing critical infrastructure that would drive the industrial sector for economic growth.
Nzekwe said that if the sector was able to produce sufficient goods at a lower cost, it would solve the problem of too much money chasing few goods in circulation.
