Former CBN director Okunronmu advises MPC on fiscal policies to adopt to tackle the economy's rising inflation

Okunronmu, also a former CBN director, advised in an interview with the Nigeria News Agency (NAN) on Monday in Ota, Ogun, ahead of the two-day Monetary Policy Committee (MPC) meeting.    NAN reports that the MPC will begin a two-day meeting today to decide on germane measures for streamlining Abuja's economy.  Nigeria's inflation rate rose to 16.82 percent in April from 15.92 percent in March, the highest in eight months, according to the National Bureau of Statistics (NBS).    The former CBN director stressed the need for Apex Bank to employ efficient fiscal policy with monetary policy harmonization to reduce persistent inflation rates and innovate the economy.   

He noted that the rate of inflation is inevitable when the federal government's budget is in deficit and funded by a banking system.  Okorunmon asserted the government needs to borrow to fund its deficit budget as it does not have sufficient funds to fund its annual budget.   

“MPC needs to do what is needed by developing efficient fiscal policy with monetary policy as they have the data on what is happening in the economy. He said that the MPC needs objectivity to offer the right policies to address the problems of the country's ailing economy and rising inflation.

  Okunronmu explained that borrowing to fund the country's annual budget depends on whether the funds will be used to fund capital projects or recurring expenses.    The former CBN director appealed to the federal government to step up efforts to ensure that the borrowed funds do not become impractical.

Source