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Opinion: Obaseki's Recent Comment Suggests To Me That There Will Be Future Increase In Inflation Rate

This year, it was reported that the inflation rate in Nigeria increased to about 17.33%. This figure is the highest it has risen in four years. In all my search, I was not certain as to why it increased to that level but the recent comments by Governor of Edo state, Governor Godwin Obaseki has suggested to me the reason why it was like that.

The prices of goods and service and even electricity tariffs was increasing in the country which is as a result inflation. It was becoming unbearable for a common man to survive as even an item like Sachet Tomato which was sold for N50 is now being sold for N120 and in some places N150.

Inflation in a lay man terms is a situation where there is too many money in the economic systems and as a result if that, too many money will chase few goods. I was wondering how there was too many many in the economy and then Obaseki revelation gave me my answer.

Obaseki, while warning that here would soon be no crude oil revenue for Nigeria to spend, said that the federal government of Nigeria printed extra N60 billion for states to share in March. He shared his concerns over the habitual borrowing system of the government saying if it continues like this, the value of the naira will further reduce.

As part of his statement as quoted by Peoples Gazette, I was draw to one particular line of words which may in turn result to future increase in inflation rate. He said "In another year or so, where will we find this money that we go to Abuja to share every month? Last month, we got FAAC for March. The federal government printed an additional ₦50 to ₦60 billion to top-up for us to share,”

“We say remove subsidy, they say no. This April, next week again, we will go to Abuja and share. By the end of this year, the total borrowing is going to be in excess of ₦15 to ₦16 trillion"

This particular line shocked me; "This April, next week again, we will go to Abuja and share.".

If this should continue, we may witness further increase in inflation rate.

Content created and supplied by: UnikJay (via Opera News )

Godwin Obaseki Nigeria

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