How transport cost affects inflation, Ahmed

14 Nov How transport cost affects inflation, Ahmed

The Minister of Finance, Budget and National Planning Zainab Ahmed has attributed the inflation rate in Nigeria largely to the cost of transport.

Ahmed, who spoke on Friday at a virtual consultation and stakeholder engagement to discuss the economic and fiscal policy drivers underpinning the Finance Bill 2020, said the draft bill sought to reduce transportation cost in the country.

Ahmed explained that the bill contains “some interesting new proposals,” citing “fiscal relief for mass transit…which is designed to provide support to mass transit by reviewing the duties regime” as an example.

The minister said, “The essence why this is being done is we recognise transportation as one of the major cost drivers in the economy.

“If you look at the rate at which our inflation is going, and you disaggregate the components, you will find that inflation is largely driven by transport cost. So, the essence here is to reduce transportation cost so that businesses will have ease and pass benefits to eventual consumers.”

The nation’s inflation rate rose to 13.71 per cent in September from 13.22 percent a month earlier, according to the NBS