Aishah Ahmad, deputy governor at the Central Bank of Nigeria (CBN), says the anticipated spending for the 2019 election may have inflationary effects on the economy.
Speaking at the April monetary policy committee meeting, Ahmad said there is a need for urgent passage of the 2018 budget to boost investment and economic output.
“The anticipated huge fiscal spending for the proposed 2018 budget and preparations ahead of the 2019 elections may also have inflationary effects,” Ahmad was quoted to have said in her personal statement at the meeting.
The statement was released by the apex bank.
She said: “This in itself would obviously call for a proactive and cautious monetary policy response to ensure there is no upward pressure on inflation. Thus, I would encourage quick passage of the 2018 appropriation bill by the national assembly, to keep fiscal policy on track, boost investment, employment and economic output for the benefit of the citizenry.
“It is my opinion that monetary policy considerations at this time should prioritize reduction in the general price level, exchange rate stability, and sustaining the fragile economic growth.
“We must – while we still can – encourage the positive momentum in capital flows and accretion to reserves, while accelerating the downward inflation trajectory.”
Inflation, which had doubled to over 18 percent in January 2017, started declining since February of that year and stood at 13.34 percent in March 2018.