SBM: Efficacy of monetary, fiscal policies pivotal in Nigeria’s inflation trends

The second quarter of this year has brought about a dynamic landscape for inflation in Nigeria, according to a recent report by SBM Intelligence titled 'The Price of Everything'. The report emphasizes that addressing underlying structural challenges through a combination of monetary and fiscal policies is crucial in curbing inflation in the country. Ikemesit Effiong, Partner at SBM Intelligence, discussed these insights in an interview with CNBC Africa, shedding light on the impact of various factors on inflation trends in Nigeria. Effiong highlighted the significance of recent developments, such as the calls by telcos for autonomy to regulate prices amid macroeconomic challenges in the country. While entertainment spending has shown relative stability, recent price adjustments by platforms like DSTV and streaming services have raised concerns about the future prospects of this sector. Despite the current stability, Effiong pointed out that price increases in the entertainment industry have lagged behind those in critical segments of the economy. The interview also delved into the inflation outlook for Nigeria, with a focus on the balancing act between monetary and fiscal policies. Effiong expressed cautious optimism regarding the moderation of inflationary growth but maintained that the country has not yet reached the peak in terms of inflation levels. He underscored the importance of fiscal policies in addressing structural and infrastructural drivers that contribute to elevated inflation rates in Nigeria. Effiong suggested that while monetary policies have played a role in containing inflation to some extent, the time has come for fiscal policy to take the lead in driving down inflation. By addressing long-standing issues that fuel inflation, Nigeria can strive towards a more sustainable economic outlook. Effiong's insights during the interview provided valuable perspectives on the complexities of Nigeria's inflation trends and the potential solutions through coordinated policy interventions. The interview raised pertinent questions about the sustainability of current inflation trends in Nigeria and the role of both monetary and fiscal policies in shaping the economic landscape. Effiong's emphasis on the need for structural reforms and infrastructural development to address inflationary pressures reflects a broader conversation within the economic sphere about the path forward for Nigeria's economy. As Nigeria navigates the challenges posed by inflation, stakeholders and policymakers will need to carefully monitor the effectiveness of policy measures in achieving stability and sustainable growth. By employing a comprehensive strategy that leverages both monetary and fiscal tools, Nigeria can work towards mitigating inflationary pressures and fostering a conducive environment for economic prosperity.