Paschal Emeka, Abuja
The Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, has explained that the Federal Government has activated mechanism to tackle Nigeria’s growing inflation.
Ahmed gave the explanation when she appeared before the House of Representatives committee on finance for 2022 budget performance and the 2023 budget defence.
The Minister in response to the question by the Chairman of the committee, Hon. James Faleke, on whether there were efforts to arrest the growing inflation in the country which he said had become a concern to many Nigerians, explained that the ongoing Russian/Ukraine conflict and the decision of some central banks in US and Europe affected fiscal activities in Nigeria.
She, however, disclosed that President Muhammadu Buhari has directed national food security council to brainstorm and make recommendations on the way forward.
“On inflation, it’s a very serious situation where Nigeria’s inflation is now 23% . The inflation in Nigeria has a number of components, one of them is imported inflation, occurrences in other countries also affects Nigeria.
For example, the war in Ukraine and Russia has an impact on Nigeria in the sense that some of the input for food production are affected.
“Also, the decisions taken by the central banks in USA and Europe on monetary tightening also has an impact on their own level of inflation that also affects our country.
But in Nigeria we also have food inflation, and because of the high cost of diesel we find this showing up in food prices, so when farmers produce their goods and they have to transport them to market the increasing cost of transportation is impacting on the food prices.
“What the central bank is doing is continuing to monitor inflation by money tightening and mopping up liquidity”, she said.
Giving a review of the 2022 budget performance earlier, the Minister said that N3.52 trillion was for debt service in the N17.32 budget, adding that the level of borrowing was N1.26 trillion ahead of July, 2022 target.
According to her, in the 2022 budget, the government had a proposal of N6.1 trillion new borrowings, N3.5 trillion from domestic sources and N2.5 trillion from foreign sources, but as of August, the minister said the federal government had borrowed N4.06 trillion from local sources, including from the Central Bank of Nigeria.