An economist, Johnson Chukwu, on Tuesday in Lagos, tasked the CBN to focus on core inflation, food inflation and energy inflation to keep inflationary rate low.
Mr Chukwu, managing director of an assets management company, noted that the three price components were the main drivers of inflationary rate in Nigeria and in most economies.
“CBN should focus on the primary responsibilities of maintaining price stability,’’ he told newsmen.
He said Nigeria must also ensure increased productivity in agriculture and in other sectors to fight the rising inflationary rate.
“Government should rejuvenate agriculture and address insecurity to improve food production so as to reduce inflationary rate.
“If liquidity is kept at its present level and productivity in agriculture and in other sectors increases, the quantity of goods and services available will increase and inflationary rate will begin to moderate,’’ he said.
Mr Chukwu also charged the CBN to clear arrears of unpaid demands or arrears of unremitted FOREX obligations before thinking of increasing interest rates.
“I am against the school of thought that if Nigeria increases interest rates, local currency interest rates will attract foreign portfolio investors.
“They will not come until the arrears of unpaid demands or arrears of unremitted FOREX obligations are cleared.
“Increasing interest rates in a local economy will only hurt productivity; so that should not be the priority of the CBN,’’ he said.
The economist also told newsmen that the CBN and the federal government needed to access funding support from multilateral agencies to stabilise the exchange rate.
“Nigeria needs to build its foreign reserve and that cannot be built easily from the sale of crude oil only going by what is happening to its crude oil production.
“The shorter route will be to access funding from either the IMF, or the World Bank or any of the multinationals or bilateral partners like United States of America, the United Kingdom or China.
“Those countries can help to provide funding for Nigeria as a kind of balance of payment support.
“With that, Nigeria can clear the arrears of unmet demands for FOREX by airlines, by portfolio investors, and for matured letters of credit,’’ he said.
Mr Chukwu also faulted the idea that government should sell its stakes in some of its oil production joint ventures as, according to him, not many multinational oil companies are keen on Nigeria.