The Former Research Director of the Central Bank Of Nigeria, Dr Titus Okurounmu, has advised the Federal Government to invest more in capital projects to generate employment opportunities.
He was reacting to the two-day Monetary Policy Committee’s decision to increase the Monetary Policy Rate (MPR) from 26.25 per cent to 26.75 per cent on Tuesday in Abuja.
The former CBN research director pointed out that the massive spending on capital projects would help lower price levels, making goods and services more accessible to Nigerians.
“Nigerians are not surprised by the MPC’s decision to increase the MPR because the country’s inflation rate is about 34.19 per cent.
“Also, the MPR should be above the inflation rate for any investors to make profits; anyone borrowing money now would be making losses,” he said.
Dr. Okurounmu emphasised the need for the Federal Government to address the fiscal side if they truly want to solve the inflation problem.
Dr Titus emphasized on the necessity for the government to reduce the recurrent expenditures, as the country’s budget is in deficit.
Dr Titus Okurounmu added that investing more in capital projects would generate employment opportunities, which would help reduce price levels and inflation rates and address insecurity challenges in the country.
CBN Governor Yemi Cardoso announced the MPC’s decision to raise the MPR by 50 basis points on Tuesday.
Apparently, committee also adjusted the asymmetric corridor around the MPR to +500/-100 from +100/-300 basis points. It retained the Cash Reserve Ratio (CRR) of commercial banks at 45 per cent, merchant banks at 14 per cent, and also retained the Liquidity Ratio at 30 per cent.
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