NESG urges lower production costs, says rate cuts alone cannot curb inflation

The Nigerian Economic Summit Group has urged the Federal Government to reduce the cost of producing goods and services, warning that further interest-rate cuts alone may not bring down prices.

The call follows the Central Bank of Nigeria’s September decision to cut its benchmark Monetary Policy Rate from 26.5 per cent to 23 per cent. NaijaTrend reported that decision here. The rate influences borrowing costs and other interest rates in the economy.

Faith Iyoha, the NESG’s acting head of research and development, made the call on Channels Television’s Business Morning on Thursday.

“Monetary policy can help to moderate the demand side of pressure. However, it is not sufficient. It cannot drive productivity,” she said.

Iyoha cited insecurity and inadequate infrastructure among the problems raising business costs and discouraging investment. She said insecurity disrupted the movement of goods, while concerns about transport routes and the safety of lives and property could deter foreign investors.

She called for policies that attract foreign direct investment into productive activities, alongside reforms that help businesses produce more goods at lower cost.

Iyoha said the aim should be for improvements in inflation figures to bring relief to households still facing high prices.

Source: Channels TV