Economist challenges W/Bank’s prediction on Nigeria’s inflation rate
An economist, Prof. Akpan Ekpo, has queried World Bank’s prediction that Nigeria’s inflation rate is expected to rise to fifth highest in Sub-Saharan Africa by the end of 2021.
Ekpo, a professor of Economics and Public Policy at the University of Uyo, Akwa Ibom, questioned the prediction in an interview on Thursday in Lagos.
Recall the bank’s Lead Economist for Nigeria, Macro Hernandez while presenting its six-monthly update on development in Nigeria on Tuesday, said Nigeria was lagging the rest of sub-Saharan Africa, with food inflation.
Hernandez included heightened insecurity and stalled reforms as slowing growth and increasing poverty.
The professor said, “First of all, we need to examine the methodology the World Bank used to arrive at the conclusion because we know that inflation has declined slightly.”
Ekpo, also Chairman, Foundation for Economic Research and Training in Lagos, said, however, that if government could solve the insecurity problems limiting economic growth and increase Agricultural production, the prediction might not hold.
According to him, there are countries with double digits inflation and still doing well.
“This means you can have inflation and yet your GDP is growing, so, it’s when you have what we call run-away or hyper inflation that is when you get worried.
“Run-away inflation means that prices are increasing everyday or every month without control,” he said.
On predictions that the inflation would push seven million more Nigerians into poverty due to falling purchasing power, Ekpo gave a suggestion to the federal government to stem it.
He urged the Federal Government to seriously implement the National Poverty Reduction with Growth Strategy Programme and the Economic Sustainability Plan documents.
“I cannot fault them on this one because already, the National Bureau of Statistics (NBS) said about 85 million Nigerians are living in poverty.
“So, World Bank just saying that confirms what our own NBS has already said.
“Now, if the government implements the National Poverty Reduction initiative document as well as the Economic Sustainability plan seriously, then we can begin to reduce the poverty rate.
“Then the economy must grow double digits, that is, 10 per cent and above for us to see reduction in poverty and more jobs creation as well, because poverty is linked to unemployment,” he added.
Oil falls from three-year high on strong dollar, hike in UK COVID cases
Crude oil prices fell nearly 2% from their highest level in three years on Thursday as the dollar strengthened after the U.S. Federal Reserve signaled it might raise interest rates as soon as 2023.
Oil demand worries resurfaced after new coronavirus cases jumped in Britain, while supply concerns over the return of Iranian barrels also weighed on the market.
Traders, however, said Friday’s presidential elections in Iran could scuttle nuclear talks between Washington and Tehran and leave U.S. sanction on Iran’s oil exports in place.
Brent futures fell $1.31, or 1.8%, to settle at $73.08 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.11, or 1.5%, to settle at $71.04.
Wednesday, Brent settled at its highest since April 2019 and WTI at its highest since October 2018. Even though Thursday’s declines were the biggest daily percentage drops since May, both benchmarks were still up over 40% so far this year.
The U.S. dollar strengthened to its highest since mid April against a basket of other currencies (.DXY) after the Fed signaled it might raise interest rates at a much faster pace than assumed.
A firmer greenback makes oil more expensive in other currencies, which could dent demand.
Britain reported its biggest daily rise in new cases of COVID-19 since Feb. 19 on Thursday, according to government figures which showed 11,007 new infections, up from 9,055 the day before.
