Ayobami Oyalowo, a former member of the All Progressives Congress Presidential Campaign Council (APC PCC), argues that Nigeria’s escalating inflation is primarily driven not by fuel prices but by the ongoing devaluation of the naira relative to the dollar.
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“I don’t think the price of fuel is a major problem; what is not improving and what is causing most of this problem is the rate at which our naira is priced against the dollar,” he said on Channels Television’s The Morning Brief programme on Tuesday.
“I sat down yesterday to look at it clearly. We are still buying fuel at less than 60 cents so what we are witnessing is not the price of fuel increase, it is the rate of our naira so undervalued or devalued.
“For as long as nobody is looking at how to shore up the value of the naira, fuel price is going to go up and as fuel prices goes up it will impact on the prices of goods and services,” he said.
He predicted that inflation would worsen next month, particularly when the September inflation figures are released, reflecting the current petroleum prices. The economist observed that, despite a recent slight improvement in food prices, a downturn could be imminent.
“We would come back next month and things are likely going to get worse because the inflation figure for September will factor in the current price of petroleum and when that is done we would come back here and discuss it and see that some other things have gone up while the food that we think has been a bit positive maybe not be that positive come September,” Oyalowo said.
