Nume Ekeghe
A member of the Monetary Policy Committee (MPC), Ms. Lydia Shehu Jafiya, has raised concerns about the current state of domestic financial conditions, which she said are tight and may be exerting upward pressure on public debt service.
Jafiya, in her personal statement at the last MPC meeting, stressed that with such strain, there is a need for continued monetary policy tightening.
She also emphasised the Nigerian government's on-going investments in affordable public transportation, infrastructure development, and security improvements to support economic activities.
She further reiterated that the MPC's strategy of tightening monetary policy, alongside the government's supportive fiscal measures, aims to create a stable economic environment.
These efforts, she said, are expected to restore investor confidence, alleviate the pressure on public debt service, and promote sustainable economic growth.
She stated: "There is no gainsaying that domestic financial conditions are tight and may be putting upward pressure on public debt service, however, further tightening of monetary policy will help restore investor confidence and sustainable recovery of output growth.
"While the current specter of inflation is driven by both monetary and structural factors, the Government remains committed to providing the right fiscal support to address structural side bottlenecks. For instance, most fiscal revenue collection platforms have been automated to improve revenue generation and facilitation of non-oil export trade."
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She also highlighted that inflation is being driven by both monetary and structural factors.
"In response, the government is implementing robust fiscal measures to address these issues. One significant step is the automation of fiscal revenue collection platforms, which has substantially improved revenue generation and facilitated non-oil export trade.
"Indeed, revenue generation has witnessed enormous improvement which has enabled the government to meet its debt obligations and thus ease pressure from the tight financial conditions associated with tighter monetary policy. It also continues to invest in affordable public transportation systems, infrastructure development, and improvement of the security situation to support economic activities, "she said.
Jafiya added: "The economy has sustained a positive growth trajectory since exiting the COVID-19 induced recession. Even though headline inflation year-on-year, rose at a moderated pace, the significant decline in the month-on-month measure, indicates that the monetary policy tightening of the last two MPC meetings has started to impact on prices."
