By Babatunde Ayedoju & Samuel Edu

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Nigeria is experiencing high inflation rate due to the shutdown of production by many companies during the cash crunch crisis and some other economic problems.

Political and economic scholars who made the observation in separate interviews with The Hope, said the naira redesign crisis brought production of goods to its lowest level.

They also pointed out that panicking, post election spending, cost of fuel and some other factors accounted for more money in circulation, that made inflation higher.

The National Bureau of Statistics (NBS) recently reported that Nigeria is experiencing high inflation and listed some of the states as including Lagos, Ondo and Bayelsa recording the highest rate for the month of March.

Those who spoke with The Hope include: Professor Olayemi Simon-Oke from the Department of Economics Federal University of Technology Akure, Dr. David Olayungbo and Dr. Abiodun Adegboye both from the Department of Economics, Obafemi Awolowo University Ile Ife.

Others include; Dr Bayo Fasunwon from the Department of Political Science, Adekunle Ajasin University, Akungba-Akoko and Dr Chris Ofonyelu from the Department of Economics, Adekunle Ajasin University Akungba-Akoko.

Professor Olayemi Simon-Oke said the issue of inflation is not only limited to the three States as listed by the National Bureau of Statistics, rather, it cuts across all the States of the federation.

“As a country, we have been experiencing hyper inflation and once inflation hits Nigeria as a whole, every state will have a share.

“Let me make it clear that most of these data are not working data, they are all just interpolation and do not reflect the present situation.

“Initially, they will say inflation implies too much money chasing few goods, but the situation in Nigeria now is few money in circulation chasing few goods.

“Production is at its lowest end and when there is limited production, there will be increase in prices of goods and services.

“Nigeria’s inflation rate is presently high on two digits, we pray it will not hit three digits.

Dr. David Olayungbo  was of the opinion that “the reason behind this is as a result of the increase in the cost of food items in the states mentioned.

“Moreover, the issue of climate change is another factor. In some states, rain has not been regular for such states to have enough food in circulation.

“The menace of insecurity is another big factor. A lot of people have been sent away from the farm though this is gradually phasing out, but the fear to return to farm is still in the minds of the people.

“As solution to this, the government should encourage irrigation farming. Government should as well improve on the security architecture of farmers, particularly farmers in the rural areas.”

His counterpart from the same department, Dr. Abiodun Adegboye said Ondo State has no reason to be listed among the states with high inflation rate.

“There is no scientific reason one can easily deduce to have caused inflation in Ondo State. We may only take a scientific position on the factors responsible for the high inflation rate only if it persists in another quarter of the year.

 Dr Chris Ofonyelu  while noting that Lagos will always be among the inflation spots because it is a commercial hub.

He also described Ondo State as an interlink state that connects many other states where raw materials are sourced from.

He said, “Now that cash is beginning to be available, most of the cash have to pass through Ondo State. Considering the fact that until recently, naira was scarce in circulation, Ondo State will definitely feel the impact of such surge in currency flow.”

Ofonyelu, however, pointed out that the inflationary trend in the three states would only be for a short time, saying “As a matter of fact, it won’t get into next month. It’s just because of the scarcity of cash that we recovered from recently.”

Similarly, Dr Bayo Fasunwon posited that the inflation is not unexpected because we are approaching planting season when the prices of food items will increase and that will affect the prices of other goods.

He also noted that while the fuel pump price is low in Lagos, it is still high in Ondo and Bayelsa States, and that can also affect the cost of living.

“The inflation rate is high generally, but Lagos is an economic hub where most people get goods, therefore it is normal for increase in demand to shoot up prices in a place like that. Also, when the goods get to their destination, such as a non-industrial state like Ondo, cost of transportation, among other factors, will affect the price,” he pointed out.

Fasunwon further blamed the trend in Lagos on taxation which, at a point, elicited protest from commuters. He noted that such a development could have a trickledown effect on other states.

The seasoned political economist recommended that government should intervene by stabilizing the market system, which would entail regulating prices and sanctioning marketers who exploit consumers.

Commenting on the factors considered in determining states with the highest inflation rate, a senior staff of the National Bearraeu of Statistics in Ondo state who craved anonymity said high cost of food, hike in transport cost among others are major factors for inflation.