The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has stated that the inflation rate in Nigeria is largely driven by the rising cost of transportation.
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.
The country has seen an increase in transport costs in recent months largely on the back of the hikes in the pump price of petrol, used by many commercial transporters to power their vehicles.
In what is the latest in a series of petrol price hikes since July, fuel marketers appear set to raise the pump price of the product this month following the increase in the ex-depot price.
READ ALSO: Naira Weakens To 470/USD In Parallel Market
In lieu of this, the average transport fare paid by commuters for bus journeys within a city increased by 12.70 per cent month-on-month and 48.02 per cent year-on-year to N278.88 in August, the latest data from the National Bureau of Statistics showed.
Ahmed said the bill contained “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.”