Sustain control measures against inflation, World Bank tells CBN

The World Bank Group has asked the Central Bank of Nigeria (CBN) to sustain inflation control measures. The Senior Economist for Nigeria at World Bank Group, Sameer Matta, said this  at the launch of the 2025 macroeconomic outlook of the Nigerian Economic Summit Group (NESG). Speaking during a panel session at the event, Matta said […]

The World Bank Group has asked the Central Bank of Nigeria (CBN) to sustain inflation control measures.

The Senior Economist for Nigeria at World Bank Group, Sameer Matta, said this  at the launch of the 2025 macroeconomic outlook of the Nigerian Economic Summit Group (NESG).

Speaking during a panel session at the event, Matta said the CBN must sustain measures to tame inflation.

“I think what is critical in terms of inflation is to stay the course. I think that the central bank needs to continue to be focused on making sure that inflation is under control.

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“Obviously, part of it is related to the supply side. What can be done to improve the yield on the agriculture side. What can be done to improve the link between rural and urban areas.

“There is the question of what can be done on the trade policy side. One would be to increase production locally, but that would take time.

“One of the things that can be done on the trade policy side is to think through which sectors could be targeted to allow some tariffs to be adjusted,” Matta said.

Matta said the cost of not doing reforms is two per cent of Nigeria’s gross domestic product (GDP) for fuel subsidy and two per cent of GDP for foreign exchange (FX) subsidy.

The economist said “I would liken these reforms to someone with a hard medical condition who had to make tough choices.

“Let’s not forget that at some point in Nigeria, the debt service to revenue was 100 per cent; now, the good news is that we are around 50 percent, and that is a big decline.

“The cost of reforms comes mainly from high inflation, and in the case of Nigeria specifically, food inflation is impacted by FX and the fact that lots of agricultural products are impacted by the price of petrol.

“That means the impact of these reforms is being felt by the most vulnerable.”

Also speaking on inflation, Christian Ebeke, Nigeria’s country representative at the International Monetary Fund (IMF), reiterated the need for coordination between the fiscal and monetary authorities.

He said it is important that efforts to bring inflation down by the fiscal authorities are done in the “Context of better coordination”.

Beke said “For example, one of the key decisions that took place last year was the commitment by both the central bank and the fiscal authorities to strengthen coordination.

“We didn’t see Ways and Means accrue again as we have seen in the past year in Nigeria, and it was welcome.

“This is something that should bring inflation down by tightening financial conditions but also by reducing money in circulation.”