ACTN Urges FG to Explore Inflation Control Measures Beyond Interest Rate Hikes
The Association of Corporate Treasurers of Nigeria (ACTN) has called on the Federal Government to adopt alternative strategies in tackling inflation, cautioning against further increases in interest rates which they argue could stifle business activity and economic growth.
Speaking at a recent press briefing ahead of the 2024 Treasury360 Conference and Exhibition, ACTN President Adeyinka Ogunnubi emphasized the need for innovative and non-monetary approaches to inflation management. He highlighted the burden that Nigeria’s high inflation, especially food inflation nearing 40%, places on both corporate treasurers and the wider economy.
“The government needs to look beyond just interest rate regulation,” Ogunnubi said. “With food prices as a major driver of inflation, simple improvements in transportation, supply chains, and storage systems could have a meaningful impact without exacerbating borrowing costs.”
He further criticized what he described as “price gouging” within the food supply chain and questioned why locally produced staples like beans are significantly affected by fluctuations in foreign exchange rates. Ogunnubi urged stakeholders to address these systemic inefficiencies and price inconsistencies.
Ogunnubi noted that treasurers across Nigeria are adopting more resilient strategies to cope with ongoing macroeconomic volatility. He described the theme of the 2024 conference—“Insurance Implications & Building Sustainable Treasury Strategies: Nigerian Perspectives on Tackling Inflation and Interest Rate Uncertainty”—as timely and relevant given the economic challenges facing the nation.
Also speaking at the event, ACTN board member Benedict Ologbosera warned that the Central Bank’s benchmark interest rate of 27.25% is discouraging productive investments, particularly in agriculture and manufacturing sectors.
“Why would anyone invest in agriculture when they can earn up to 30% just by keeping their money in fixed deposits?” Ologbosera asked, adding that high borrowing costs are pushing businesses to downsize or scale back operations.
He explained that many firms are shifting to “cash-and-carry” models to reduce reliance on trade credit and protect their cash flow amid inflationary pressures.
The ACTN stressed the need for a more stable economic environment, urging the government to implement policies that mitigate exchange rate and interest rate volatility, ultimately supporting business growth and long-term investment.
The 2024 Treasury360 Conference and Exhibition is scheduled for November 14 in Lagos and is expected to serve as a platform for industry leaders and policymakers to share insights on navigating economic uncertainty through sustainable treasury practices.
