The House of Representatives yesterday called on the federal government to urgently take steps to tackle the rising cost of living with devastating effects on Nigerians.
The lawmakers made the call during the appearance of the Ministers of Finance and Coordinating Minister of the Economy, Wale Edun; Budget and National Planning, Atiku Bagudu; the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso and the Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji, before the House.
The session was part of the second edition of the Sectoral Debate/Dialogue, which was introduced by the House to interact with heads of ministries, departments and agencies (MDAs) on government policies.
The lawmakers demanded an explanation of the measures being taken by the CBN, FIRS and the ministries as regards the current economic situation in the country.
Earlier, they adopted a motion on matters of urgent public importance moved by Rep. Ayokunle Isiaka (APC, Ogun), asking the federal government to act fast and address the rising cost of living.
Speaking, Rep. Ahmed Jaha Babawo (APC, Borno) said nobody needed a soothsayer to conclude that Nigerians were hungry and angry.
He said the government must take action, especially in terms of security, to make things work better for Nigerians.
According to him, from 2020 to date, the prices of staple food and other items have risen by over 500%, placing Nigerians in a precarious situation.
Rep. Kingsley Chinda (PDP, Rivers) said people were living in poverty, penury and pervasive insecurity.
He said, “The least we can do is to tell the truth to power.”
Other lawmakers questioned the ministers, CBN governor and FIRS chairman over their policies and their effects on Nigerians.
The officials later responded to the questions and shed more light on the policies being pursued, as well as the measures being put in place to address the challenges facing the nation.
Speaking, the CBN governor said the country was at a turning point. He said though the reforms across different segments of the economy were initially challenging, they were aimed at addressing the challenges sustainably.
He said, “I am confident that positive outcomes are already emerging and will become more apparent shortly. The dedicated and relentless efforts being made are certain to bring about significant and positive changes for our economy.
“Notably, recent reports from international rating agencies such as Fitch, Moody’s, S&P and commendations from multilateral banks like the World Bank reflect this positive trajectory, with upgrades to Nigeria’s ratings from stable to positive.
“These reports acknowledge the potential reversal of the deterioration in the country’s fiscal and external position due to the authorities’ reform efforts. While recognising the painful adjustments, they all point to a direction that will unlock much-needed growth and development for our economy in the medium to long term”, he added.
Cardoso, however, informed the lawmakers that despite the commendations, the concerns regarding the cost of living and currency exchange rates remained.
He said: “Indeed, this is the major topic of concern in our villages, our towns and our cities. The urgency of the matter is not lost on us at the Central Bank and I assure you, we are working tirelessly with colleagues from across government, including with the leadership of this House to bring lasting solutions.
“Broader escalation of conflicts could disrupt energy markets, trade routes, and financial markets, leading to a slowdown in growth and increased inflationary pressures. Additionally, rising trade barriers, protectionist policies, and global value chain restructuring could exacerbate uncertainties in global trade.
“In this challenging landscape, key policy priorities involve ensuring durable inflation reduction, addressing fiscal pressures, and fostering sustainable and inclusive growth.
“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, aiming to rein in inflation to 21.4 per cent, aided by improved agricultural productivity and easing global supply chain pressures.
“The CBN’s inflation-targeting framework involves clear communication and collaboration with fiscal authorities to achieve price stability, potentially leading to lowered policy rates, stimulating investment, and creating job opportunities”, he added.
The CBN governor said the Nigerian foreign exchange market was facing increased demand pressures, causing a continuous decline in the value of the naira.
“Factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.
“To address exchange rate volatility, a comprehensive strategy has been initiated to enhance liquidity in the FX markets. This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for BDCs, enforcing the Net Open Position limit, and adjusting the remunerable Standing Deposit Facility cap.
“Permit me to say that put simply, the exchange rate is determined by the dynamics of supply and demand for a product or service. In essence, similar to the pricing of cows or cars, the value of the US dollar in Nigeria is determined by the balance of US dollars entering the country and the demand for US dollars among Nigerians,” he added.
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