The International Monetary Fund (IMF) has counseled the Federal Government of Nigeria on how to rein in inflation.
The IMF warned that the government should look beyond monetary policy tools in its fight against inflation.
It also urged the authorities to, among others, channel investments to infrastructure, education, and healthcare.
IMF directors, Tobias Adrian and Victor Gaspar disclosed in a report, titled: “How fiscal restraint can help fight inflation.” The Report was released yesterday.
Adrian explained that while monetary policy has the tools to subdue inflation, fiscal policy can put the economy on a sounder long-term footing through investment in infrastructure, health care, and education.
He called for fair distribution of incomes and opportunities through an equitable tax and transfer system and provision of basic public services.
According to Adrian, the government’s support was vital to help the people and firms survive pandemic lockdowns and support the economic recovery.
“With many people still struggling, governments should continue to prioritize helping the most vulnerable to cope with soaring food and energy bills and cover other costs—but governments should also avoid adding to aggregate demand that risks dialing up inflation. In many advanced and emerging economies, fiscal restraint can lower inflation while reducing debt,” he stated.
