The closure of the country’s land borders is contributing to the rising inflation affecting the economy, the Federal Government has admitted.
Zainab Ahmed, Minister of Finance, Budget and National Planning, made the admission on Wednesday while fielding questions from journalists after the Federal Executive Council meeting at the Presidential Villa, Abuja.
According to the latest figures released by the National Bureau of Statistics (NBS), inflation stood at 11.61 per cent as of October.
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Ahmed revealed that the rise in inflation is as a result of an increase in food prices arising from border closure.
“On inflation, headline inflation declined every month for several months before we noticed an optic in the last two months. And now headline inflation is at about 11:61 per cent as at the end of October. The slight increase in this inflation between September and October is due to food inflation.
“The food inflation we are ascribing to prices of cereals, rice and fish. And part of the reason is the border closure but the border closure is very very short and temporary and the increase is just about two basis point. Remember there was a time inflation was nine per cent and it grew to about 18 per cent in January 2017 when we were in recession.
“The relationship between inflation, interest rates and growth is managed by the monetary authorities and is a management that is tracked on a regular basis,” she said.
The minister, however, insisted that the closure of the borders was a temporary measure taken by the Federal Government to curb smuggling and prevent the entry of prohibited goods into Nigeria.
“We are still discussing with our neighbours to ensure that we all respect our trade protocols, especially now that the African Continental Free Trade Area Agreement is coming into effect,” she said.