MPC should pay attention to growth, not inflation – Expert

As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) begins its two-day 283rd meeting Tursday in Abuja, the first for the year 2022, members have been told to focus on growth instead of Inflation.

Dr. Biodun Adedipe, an economist and Chief Consultant, BAA Consult, made the point while discussing his views on the MPC’s policy direction.

According to him, Inflation witnessed a downward trend in the last eight months before it increased again to 15.63 per cent in December 2021. He said the inflationary pressures would persist because 2022 is a pre-election year, and this would involve spending on political campaigns, resulting in increased domestic liquidity.

He said that Inflation would be tempered by economic growth, with the gross domestic product (GDP) growing between 3.23 per cent and 3.5 per cent at the close of 2022.

He noted that the non-oil sector would continue to drive growth, and despite the rise in green energy, hydrocarbons would still be in high demand.

He noted that Inflation would still be double-digit for the year but would not rise above 19 per cent, unlike some other African countries.

On the exchange rate, he said the MPC would need to interrogate the devaluation of naira because the nation’s import bill had grown exponentially, putting pressure on the external reserves. He cited a report that noted that between January and September 2021, Nigeria spent $8 billion monthly on imports.