Economic and financial experts have advised the Central Bank of Nigeria not to neglect economic growth strategies amid the nation’s soaring inflation.

They expressed their concerns in a statement following the Monetary Policy Committee meeting in Lagos on Tuesday.

The experts also advised the CBN on the need for a balanced approach.

The committee decided to raise the benchmark interest rate by 200 basis points to 24.75 per cent, up from the 22.75 per cent figure in February.

CBN Governor Yemi Cardoso cited the decision as a response to the country’s soaring inflation rate, which reached 31.70 per cent in February.

However, Director of the Centre for Economic Policy Analysis and Research, Prof. Ndubisi Nwokoma, called for an incremental approach to foster economic growth.

Mr Nwokoma said that while addressing inflation was crucial, the current economic challenge in Nigeria extended beyond inflation to stagflation, necessitating a consideration of growth concerns in future MPC meetings.

Stagflation, a scenario of slow economic growth, inflation, and rising unemployment, requires a nuanced policy response figure of 22.75 per

The professor of economics said a hike in the benchmark interest rate by 200 basis points would bring the total increase to 600 basis points within a month.

“Much as tightening is necessary at this time in view of elevated inflation, MPC should tighten policy incrementally and in a measured manner that optimises the CBN’s policy tool kit without undue reliance on the monetary policy rate.

“The decision by the MPC to increase the MPR by 200 bps makes it a total of 600 bps in just one month if one adds the 400 bps delivered in February,” he added

This is in addition to a high CRR of 45 per cent representing sterilised bank deposits.

Mr Nwokoma added, “This development is now driving undue pressure by banks on the CBN’s Standing Lending Facility and increasing cost of funds generally.

“The CBN should recognise that the challenge currently facing the Nigerian economy is not just inflation but stagflation, and to this end the CBN should equally have regard to growth concerns in future meetings of the MPC,” he said.

On his part, Founder, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the nation’s economy needed more attention for economic growth, job creation and production as it tackles inflation.

Mr Yusuf added that the balancing act was important for the economic recovery process.

The CPPE commended the commitment of the CBN to tackle inflation, but noted that the limitations of monetary policy in needed to be recognised.

“There are contextual issues of weak transmission mechanism, weak financial inclusion, risk to financial intermediation and the escalating financing cost to the real economy.

“The economy needs as much attention to economic growth, job creation and production as it deserves for tackling inflation. This balancing act is critical for the economic recovery process,” Mr Yusuf said.

(NAN)