Don harps on increased food production to check inflation

A Senior Economist at Olabisi Onabanjo University, Ago-Iwoye, Ogun, Prof. Sheriffdeen Tella, has called for increased food production in the country to check inflation.

Tella made the call in an interview with newsmen in Lagos on Wednesday while reacting to the recent drop in the country’s inflation rate.

The National Bureau of Statistics (NBS) reported that the CPI fell to 17.78 in February from 18.72 in January, the first time in 15 months.

According to Tella, the current economic challenge in the country has compelled Nigerians to go for the basic needs of food and drugs.

The economist said that many people were now very selective of goods to buy because of the recession, while and the foreign exchange crises had caused a drop in the demand for goods and services.

He said that the downturn in the economy had also led Nigerians to restructure their purchasing preferences.
“People are now selective in their buying of goods and services; demand has fallen and there is general diversion to basic needs.

“Nigerians have shifted to meeting their basic needs of food and drugs,’’ Tella said.

The economist dismissed insinuations that the drop in inflation rate had something to do with the apparent stability in the foreign exchange market and the strengthening of the naira.

He said that the stability of the foreign exchange market and the appreciation of the naira could only bring down inflation if the CBN sustained its intervention and put other economic fundamentals right.

“If agricultural production is sustained and the CBN brings down the lending rate, inflation will be controlled.
“Also, if the exchange rate continues to remain stable, the prices of goods and services will come down,’’ Tella said.

NAN reports that the Nigerian economy appears to be on its way to recovery.

Since the CBN started its intervention in the interbank market, the naira has started appreciating.