The World Bank Group has advised Nigeria to take steps to reduce government borrowing from the Central Bank to address inflationary pressures on the economy.
This recommendation was put forward by Alex Sienaert, the World Bank’s Lead Economist for Nigeria, during an economic review session held at the Lagos Business School.
While acknowledging the Nigerian government’s recent economic reforms, Sienaert stressed the importance of sustaining these reforms to facilitate economic recovery and achieve substantial growth in the near future.
One of the notable impacts of the reforms, according to Sienaert, is the significant increase in gasoline prices, which has added pressure on the economy.
To combat inflation, Sienaert proposed implementing various strategies, including reducing subsidized Central Bank lending to medium and large firms as well as curbing government borrowing from the Central Bank. These measures aim to curtail the increase in the money supply, which can contribute to inflationary pressures.
Another suggestion from the World Bank economist is to replace imports with foreign exchange restrictions through tariffs. This measure aims to manage the balance of payments and stabilize the currency, thus contributing to inflation control.
Tackling inflation is recognized as a substantial challenge, and implementing these measures requires careful consideration and coordination with the broader economic policies of the country.
As Nigeria seeks to strengthen its economic resilience and address inflationary challenges, the advice from the World Bank emphasizes the importance of prudent fiscal and monetary measures to achieve sustained and balanced economic growth.\
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