The National Bureau of Statistics (NBS), few days ago, released its July inflation figure, which rose to 12.8 per cent, the highest ever recorded in the past 27 months. Some say the rising inflation was cost-pushed occasioned by naira devaluation which affected cost of production, while others attribute it to scarcity of exchange rate, scarcity of goods due to lockdown, border closure and general poor state of the economy.
It is however unfortunate that the rising prices of goods is coming at this time of increasing unemployment, meaning more suffering for Nigerians. Economists say the recent lockdown in parts of Nigeria, nay the whole world, as a result of the rampaging coronavirus led to unprecedented rise in the prices of goods and services across the country, as well as fall in outputs due to the lockdown.
For instance, reports from major markets indicate that a basket of tomatoes now sells as high as between N30, 000 and N35, 000 against the previous price of N10, 000. In some rural markets, a painter of garri that sold for between N500 and N600, has gone up to N1, 200. A kilogramme of fish earlier sold for N800 now costs N2, 000. A 50 kilogram bag of local rice, which was sold for between N14, 000 and N17, 000, now goes for between N19, 000 and N23, 000.
The prices of drugs have also increased. The price of a pack of hand gloves earlier sold for N500 now costs N4, 000. The prices of Vitamin C tablets and other drugs that boost the immune system have also gone up as well as hand sanitizers.
Experts are also of the view that there had been fall in outputs due to COVID-19 lockdown. There is a huge gap between demand and supply, which necessarily causes inflation. The exchange rate has depreciated badly resulting in high cost of production and consequent rise in prices. However, the major items that pushed up the prices are related to foods and local products, implying that the major problem has to do with output shortage.
Therefore, there is urgent need for government to intervene and avert the impending crisis that may arise if the situation is not checked. Governments at all levels must be commended, though, for the gradual easing of the lockdown, especially the federal government’s plan to open international flight.
Going forward, government should speed up its fiscal intervention in domestic production. Central Bank of Nigeria (CBN) should quickly stabilise exchange rate at the parallel market and Bureau De Change by ensuring foreign exchange availability. Government should introduce various regulatory measures to check sharp practices, including hoarding and diversion of foreign exchange.
It should equally pursue diversification of the productive sectors into local contents for inputs. Mono product economy is dangerous. Government should enhance investment in the agriculture, mining and extractive industries, while entrepreneurs using local contents should be encouraged to reduce importation.
Furthermore, government should speed up its fiscal intervention in domestic production. The importance of food and pharmaceutical products cannot be over-emphasised, especially in this critical period. They are necessary to the health and survival of the citizens.
The COVID-19 pandemic has exposed the inadequacies in our productive and healthcare delivery systems. It is sad that almost 60 years after independence, Nigeria still rely on imports for almost all our daily needs, including drugs, food and even toothpicks. The importation of virtually every product Nigerians need does not augur well for us. There is need to look inwards and encourage organizations that can manufacture these products that we import.
Experts believe that no nation can depend on another for the supply of its basic needs. We must begin to assert our sovereignty by ensuring that we produce most of the commodities we consume. There is also need for government to pursue price regulatory measure without hampering investment. It is disheartening that local rice has decimated foreign rice in our markets and yet the price of local rice is beyond the reach of an average Nigerian.
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