The Federal Government's Plan to Curb Rising Inflation and the Dangers of Toxic Chemicals

Feranmi Olaseinde

Feranmi Olaseinde

Sep 08, 20233 min read

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The Federal Government's Plan to Curb Rising Inflation and the Dangers of Toxic Chemicals

Introduction:

In a bid to rein in inflation, the Federal Government of Nigeria is considering cutting the cash in circulation, according to Minister of Finance and Coordinating Minister for the Economy (CME), Mr. Wale Edun. This strategy involves controlling the growth of money supply through various measures, such as adjusting interest rates, open market operations, or setting reserve requirements for banks. Additionally, caution will be exercised in how the federal, state, and local governments disburse money to strike a balance between ensuring adequate money supply for economic growth and preventing excessive inflation that can lead to economic instability.

Money Supply and Inflation:

To understand the government's plan to curb rising inflation, it is essential to grasp the relationship between money supply and inflation. Money supply refers to the total amount of money in circulation within an economy. When the money supply increases rapidly, it can result in inflation, which erodes the value of currency and causes economic instability. By controlling the growth of money supply, the government aims to strike a delicate balance that supports economic growth while preventing excessive inflation.

Diversifying Revenue Streams:

The government's ability to effectively manage money supply relies on diversifying revenue streams. In Nigeria, the revenue used to support economic growth and meet government expenditure comes from various sources. The total gross revenue of N1.746 trillion is composed of statutory revenue, Value Added Tax (VAT) revenue, Electronic Money Transfer Levy (EMTL) revenue, and Exchange Difference revenue. By diversifying revenue streams, the government can reduce reliance on a single source and better manage money supply to curb inflation.

Federal Allocation and Economic Stability:

The Federal Account Allocation Committee (FAAC) plays a crucial role in distributing revenue to the three tiers of government in Nigeria. Last month, the FAAC agreed to share N966.11 billion as federal allocation. Of this amount, the Federal Government received N374.48 billion, the state governments received N310.67 billion, and the 774 local government areas received N229.41 billion. By ensuring a fair and efficient distribution of funds, the government contributes to economic stability and growth across all levels of governance.

The Dangers of Toxic Chemicals:

In a different context, the BBC reported on the dangers of toxic chemicals such as diethylene glycol (DEG) and ethylene glycol (EG). These chemicals are primarily used for industrial purposes but pose significant health risks if mishandled or improperly regulated. It is crucial for governments to prioritize the safety and regulation of such chemicals to protect public health and the environment.

Actionable Advice:

  • 1. Promote Financial Literacy: One way individuals can contribute to economic stability is by enhancing their financial literacy. By understanding basic economic concepts such as money supply, inflation, and diversification of revenue, individuals can make informed financial decisions that align with the government's objectives.
  • 2. Support Effective Regulation: Citizens should actively advocate for effective regulation of toxic chemicals to ensure public safety and environmental protection. By staying informed and participating in relevant discussions and initiatives, individuals can contribute to a safer and healthier society.
  • 3. Embrace Sustainable Practices: Businesses and individuals should prioritize sustainable practices that minimize waste and reduce reliance on toxic chemicals. By adopting environmentally friendly alternatives, we can contribute to a more sustainable future.

Conclusion:

The Federal Government's plan to curb rising inflation by cutting money supply demonstrates a proactive approach to maintaining economic stability. Through diversifying revenue streams, ensuring fair federal allocation, and promoting financial literacy, the government aims to strike a balance between supporting economic growth and preventing excessive inflation. Additionally, it is crucial for governments to regulate toxic chemicals effectively to protect public health and the environment. By embracing sustainable practices and advocating for responsible regulation, individuals can contribute to a healthier and more stable society.

Resource:

  1. "Wale Edun: FG To Curb Rising Inflation With ‘Cut In Money Supply’ - Politics - Nigeria", https://www.nairaland.com/7813555/wale-edun-fg-curb-rising (Glasp)
  2. "The Gambia - BBC News", https://www.bbc.com/news/topics/cdl8n2edeydt/the-gambia (Glasp)

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