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Fri, Mar

CBN Fears That 2019 Election Spending May Worsen Inflation

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The Central Bank of Nigeria has cautioned politicians against excessive spending ahead of the 2019 general elections, saying the anticipated spending may have “inflationary effects” on the country’s economy.

Deputy Governor, CBN, Aisha Ahmad, stated this during the Bank’s April monetary policy committee meeting in Abuja.

Ahmad also called for quick passage of the 2018 Budget, saying it will boost investment and economic output across the nation.

She said: “The anticipated huge fiscal spending for the proposed 2018 budget and preparations ahead of the 2019 elections may also have inflationary effects.

“It is my opinion that monetary policy considerations at this time should prioritize reduction in the general price level, exchange rate stability, and sustaining the fragile economic growth.

“We must – while we still can – encourage the positive momentum in capital flows and accretion to reserves, while accelerating the downward inflation trajectory.

"Recall that the National Bureau of Statistics (NBS) disclosed last month that Nigeria’s inflation rate dropped from 14.33 in February to 13.34 per cent in March year-on-year.

The bureau stated in its Consumer Price Index report, the figure showed 14 consecutive reductions in inflation rate since January 2017.

Nigeria’s inflation as at January 2017 was over 18 percent.

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