Adebajo, the Chief Executive Officer of CFG Advisory, has cautioned that Nigeria could follow the footsteps of Zimbabwe and Venezuela if inflation is left unchecked.
Highlighting the urgency of tackling inflation, Adebajo emphasized the critical nature of the current economic management in the country.
These remarks were made during an appearance on the Morning Show program on Arise Television.
When asked about the impact of the Central Bank of Nigeria’s (CBN) newly adjusted interest rate on small businesses, Adebajo expressed the need for a short-term interest rate hike.
He elaborated, “In practical terms, consider this: our purchasing power is decreasing rapidly. The Naira that once bought a bag of garri can no longer do so. This shift to a ‘sachet economy’ reflects our struggle to make ends meet in Nigeria, where even alcohol is now sold in sachets due to this economic strain. Our Naira can’t stretch as far as it used to.”
Continuing, Adebajo warned, “To combat rising inflation and preserve the value of our money, we must temporarily raise interest rates. This strategy has been implemented in Nigeria in the past, notably in 2011, with successful outcomes.”
He stressed the importance of reverting to previous economic conditions, citing the correlation between controlled inflation and increased productivity. Failure to address inflation, as Adebajo pointed out, could lead Nigeria down the path of hyperinflation akin to situations in Zimbabwe and Venezuela.
Concluding his remarks on a crucial note, Adebajo remarked, “It is imperative to focus on managing inflation effectively in today’s economic landscape. The ongoing distractions, such as the Dangote refinery project, detract from the core issue. The success of such key projects can play a vital role in alleviating inflationary pressures.”