The Lagos Chamber of Commerce and Industry (LCCI) has advised that the Federal Government should tackle issues of national security in a bid to control food production to soften the rising inflation.
This was disclosed by Dr Muda Yusuf, Director-General, LCCI, in a statement on Wednesday in Lagos, following the recently released inflation report for January.
The LCCI boss warned that the FG needs to stabilize the nation’s FX to improve liquidity for businesses, alongside easing business bottlenecks in Nigeria’s infrastructure value chains, citing that Nigeria’s unstable FX policy and fiscal deficit by the Central Bank are also responsible for the rising inflation.
“The Lagos Chamber of Commerce and Industry notes with concern the continued uptrend in domestic consumer prices as headline inflation further accelerated to 16.47 per cent in January 2021, the highest since May 2017,” he said.
“The uptick in domestic prices was largely driven by the persistent food inflationary pressures, with food inflation hitting a record 20.57 per cent, the highest level since the 2009 CPI series began.
“Higher prices translate to increased production costs for manufacturing companies, with consequent impact on their bottom-line since it is not in all situation that higher inputs cost can be transferred to consumers.
“This weakens the capacity of corporates to deliver value to shareholders via dividend payment amid dim profit prospects,” he added.
He warned that the rising food prices would be a concern for low-income households in Nigeria and urged the FG to tackle Nigeria’s insecurity issues to stem the rising food inflation.
“Rising food prices would see most low and middle-income households spend more on food commodities, with little amount to save and/or invest, thereby pushing more Nigerians below the poverty line.
“Government authorities at national and sub-national levels should address security concerns in the country, due to its scale of importance as far as food production is concerned in Nigeria,” he said.
What you should know
- Nairametrics had earlier reported that Nigeria’s consumer price index, (CPI) which measures inflation, increased by 16.47% (year-on-year) in January 2021. This is 0.71% points higher than the rate recorded in December 2020 (15.75%).
- The LCCI had earlier warned that Nigeria’s inflation rate, which had risen for 15 consecutive months, would continue its climb by 2021.