Treasurers Urge Nigerian Government to Tackle Inflation with Non-Interest Rate Solutions
Key Highlights:
1. Call for Non-Interest Alternatives
The Association of Corporate Treasurers of Nigeria (ACTN) has advised the Federal Government to explore strategies beyond interest rate hikes to curb inflation. According to ACTN President Adeyinka Ogunnubi, such alternative approaches are essential for economic stability and growth, particularly as interest rates significantly affect corporate treasurers and the broader economy.
2. Addressing Food Inflation and Supply Chains
At the recent launch of the Treasury360 Conference and Exhibition, Ogunnubi emphasized the role of high food inflation, nearing 40%, as a major contributor to overall inflation. He proposed that improved food transportation, supply chains, and storage could mitigate food prices, thus reducing headline inflation without additional borrowing costs for Nigerians.
3. Impact on Corporate Treasury Strategies
With the conference theme “Policy Implications & Building Sustainable Treasury Strategies: Nigerian Perspectives on Tackling Inflation and Interest Rate Uncertainty,” Ogunnubi noted that companies are increasingly adopting resilient financial strategies to navigate inflation and interest rate volatility.
4. Concerns Over Food Supply Chain Pricing
Ogunnubi criticized “price gouging” within food supply chains, questioning why locally produced goods, like beans, are impacted by foreign exchange rates. He urged stakeholders to address these pricing inconsistencies to reduce costs.
5. Interest Rates and Investment Disincentives
ACTN board member Benedict Ologbosera highlighted that current interest rates, at 27.25%, discourage investment in sectors like agriculture and manufacturing. He pointed out that high returns on fixed deposits often deter investors from productive ventures, leading companies to reduce costs and cut jobs to cope with elevated borrowing expenses.
6. Shift to Cash-Based Transactions
Many companies are now favoring “cash and carry” models to reduce their reliance on credit and exposure to inflation. This shift aims to protect cash flow in a high-inflation environment, given the adverse effects of credit reliance on businesses.
7. Upcoming Treasury360 Conference
Scheduled for November 14 in Lagos, the Treasury360 Conference will offer insights on sustainable financial strategies. Notable speakers include Central Bank Governor Yemi Cardoso, UK ACT Deputy Chief Executive Janet Legge, and Dr. Muda Yusuf from the Centre for Promotion of Private Enterprise.
Key Highlights:
1. Call for Non-Interest Alternatives
The Association of Corporate Treasurers of Nigeria (ACTN) has advised the Federal Government to explore strategies beyond interest rate hikes to curb inflation. According to ACTN President Adeyinka Ogunnubi, such alternative approaches are essential for economic stability and growth, particularly as interest rates significantly affect corporate treasurers and the broader economy.
2. Addressing Food Inflation and Supply Chains
At the recent launch of the Treasury360 Conference and Exhibition, Ogunnubi emphasized the role of high food inflation, nearing 40%, as a major contributor to overall inflation. He proposed that improved food transportation, supply chains, and storage could mitigate food prices, thus reducing headline inflation without additional borrowing costs for Nigerians.
3. Impact on Corporate Treasury Strategies
With the conference theme “Policy Implications & Building Sustainable Treasury Strategies: Nigerian Perspectives on Tackling Inflation and Interest Rate Uncertainty,” Ogunnubi noted that companies are increasingly adopting resilient financial strategies to navigate inflation and interest rate volatility.
4. Concerns Over Food Supply Chain Pricing
Ogunnubi criticized “price gouging” within food supply chains, questioning why locally produced goods, like beans, are impacted by foreign exchange rates. He urged stakeholders to address these pricing inconsistencies to reduce costs.
5. Interest Rates and Investment Disincentives
ACTN board member Benedict Ologbosera highlighted that current interest rates, at 27.25%, discourage investment in sectors like agriculture and manufacturing. He pointed out that high returns on fixed deposits often deter investors from productive ventures, leading companies to reduce costs and cut jobs to cope with elevated borrowing expenses.
6. Shift to Cash-Based Transactions
Many companies are now favoring “cash and carry” models to reduce their reliance on credit and exposure to inflation. This shift aims to protect cash flow in a high-inflation environment, given the adverse effects of credit reliance on businesses.
7. Upcoming Treasury360 Conference
Scheduled for November 14 in Lagos, the Treasury360 Conference will offer insights on sustainable financial strategies. Notable speakers include Central Bank Governor Yemi Cardoso, UK ACT Deputy Chief Executive Janet Legge, and Dr. Muda Yusuf from the Centre for Promotion of Private Enterprise.