NECA says benchmark interest rate ineffective, warns against hyperinflation by December

*The Nigerian Employers Consultative Association cautions the Federal Government against the tightening monetary policy stance of the Central Bank Nigeria by raising the benchmark interest rate, warning the continuous rising inflation may hit 25 percent before December 2023

Alexander Davis | ConsumerConnect

The Nigerian Employers Consultative Association (NECA) has warned that the continuous rising of inflation, if not controlled can hit 25 percent before the end of 2023.

Mr. Wale Oyerinde, Director-General of NECA, stated the recent decision by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to raise the Monetary Policy Rate (MPR) by 25 basis points to 18.75 percent could be chaotic to the growth trajectory of the West African country.

Oyerinde said the CBN’s tightening monetary policy stance by raising the benchmark rate had proved ineffective in the economy.

The NECA Chief stated: “Based on the recent decision by the Monetary Policy Committee of the Central Bank of Nigeria to raise the Monetary Policy Rate by 25 basis points to 18.75 per cent, such increase could be chaotic to the growth trajectory of the nation.

“It is apt that the apex bank collaborates with fiscal authorities in addressing the fundamentals behind the persistent increase in consumer prices, which has defied the policy measures put in place by previous rate hikes.”

Oyerinde further noted: “Tightening monetary policy stance by raising the anchor rate has proved ineffective, as inflation has been rising steadily and could climb as high as 25 percent before year end.”