EDITORIAL: The Inflation Dispute

THE incoming administration must challenge indeed debunk the myth that the current spike in inflation is a bye-product of the mercifully now demonstrated COVID-19 pandemic or carried too far perhaps a natural disaster. 

It is no such thing. Such muddled-up thinking should have been laid to rest a long time ago. Reminiscent of previously discredited fairy tales about famine. Unlike the fables of yore, the work of economic anthropologists and economic historians has now shown that famines and pestilences are not the vengeances of offended deities but man-made. 

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It is of relevance to recall that the great famine which led to the deaths of two million people in Ethiopia in the seventies actually occurred at a time of surplus food supply. This motivated the Ethiopian-born Swiss economist, Elaine Gabre, to set up the widely admired Ethiopia Commodities Exchange. 

The incoming government must tackle the root cause of the great inflation which is at the highest level in seventeen years! 

There was pre-existing dysfunction in the system long before COVID. The distortions include the inability of the Central Bank of Nigeria to focus on its core mandate of ensuring price stability. The incoming government must insist on this. For price stability is the way to attain social justice and shared prosperity. 

As far as food price inflation is concerned, it must be noted that for decades the President-elect has consistently advocated the establishment of commodities exchanges as a price modulating mechanism which also side and increases production, Elaine Gabre once delivered a paper at one of the Asiwaju Bola Tinubu colloquia. This is in the right direction: for the ill-thought destruction of the erstwhile Commodities Board during the Structural Adjustment Program continues to have a negative effect on food security. Furthermore, the sub-national governments must be encouraged to concentrate on the construction of rural roads as opposed to misallocating scarce funds on vanity projects. 

Achieving price stability tops the list of priorities for the new government for it is interwoven with everything else including security.