The Lagos Chamber of Commerce and Industry (LCCI) has highlighted the importance of implementing an appropriate policy mix to address the current inflationary pressures in Nigeria. The core inflation rate slightly decreased from 34.19% in June to 33.40% in July 2024, according to the National Bureau of Statistics (NBS). This marginal reduction, the first since December 2022, reflects a modest easing of price pressures driven by a slowdown in demand and recent monetary and fiscal interventions.
Chinyere Almona, Director-General of LCCI, emphasized that the ongoing inflation scenario presents an opportunity for policymakers to focus on long-term economic challenges, particularly in the agriculture, manufacturing, and export sectors. Almona called for the continuation and expansion of government programs and policies aimed at controlling inflation and stabilizing the exchange rate. These include import duty waivers on essential goods, promoting Compressed Natural Gas (CNG) vehicles for cheaper transportation, foreign exchange market reforms, direct crude supply to local refineries, and transitioning to renewable energy.
Almona also underscored the need to tackle the root causes of food insecurity by empowering farmers with better access to information, agricultural inputs, mechanization, and modern irrigation methods. She stressed the importance of addressing issues like land use conflicts and the impact of climate change on farmlands to sustain the recent easing in food prices.
The chamber also raised concerns about the recent Central Bank report showing a slight decline in the Purchasing Managers Index (PMI) to 49.7% in July, indicating a need for consistent policy measures to boost industry confidence. Almona urged the government to maintain its efforts against crude oil theft and pipeline vandalism to ensure sufficient crude supply for local refineries, which is crucial for economic stability.
Beyond addressing food inflation, Almona called for the newly established Ministry of Livestock Development to play a significant role in addressing the rising costs of poultry and fisheries, which have been major contributors to food inflation.
Furthermore, the LCCI encouraged subnational governments to replicate successful federal initiatives at the grassroots level, leveraging increased funds for local development. The chamber also highlighted the need for sustained efforts to improve security, which is crucial for restoring investor confidence and boosting economic growth.
Finally, Almona urged the government to support the productive sectors of the economy and incentivize the production of exportable goods where Nigeria has a comparative advantage, to enhance foreign exchange earnings and stabilize the FX market.
This inflationary trend in Nigeria, if not addressed effectively, could have severe implications for hunger and food security, experts warn.
