LCCI: High Inflation May Hurt Productivity, Raise Poverty Figures

The Lagos Chamber of Commerce and Industry (LCCI) has warned that sustained high inflationary rate in the Nigerian economy might further constrain production of goods and services and lead to a steeper rise in poverty figures in the country.

It sounded this warning in a press statement titled, “LCCI Statement on February 2023 Inflation Rate,” that was signed by the Director General of LCCI, Dr. Chinyere Almona.

According to the statement, “The sustained upward trend in the general price level in recent times has had significant but bothersome impacts on the household and business sectors. Apart from eroding purchasing power, it has led to inventory stockpiles. If left unchecked, the high inflation may further constrain production, lead to a steeper rise in poverty figures, frustrate economic growth, and lead to higher unemployment and non-competitive exports, especially in the sub-region. These are not statistics that should be staring at the country in the near term.”

The LCCI also expressed concern about the excessive focus on exchange and interest rates management and tasked the fiscal and monetary authorities in the country to find effective mix of measures that ameliorate the spiraling inflationary trend in the economy.

It said: “The LCCI is concerned about the excessive focus on exchange and interest rates management. Unfortunately, this is at the expense of inflation. There is an urgent need for monetary and fiscal authorities to find an effective mix of measures and policies to thwart the worrisome trend in inflation, especially staple food prices.”

The chamber also observed that the latest statistics on inflation from the National Bureau of Statistics (NBS) showed that the Consumer Price Index (CPI) as at end-February, 2023 was 21.91 per cent against 21.82 per cent in January 2023.

It said that according to the figures that were released by the NBS,  “inflation has inched upwards by 0.09 percentage points in the period. With a 21.67 per cent rise, food prices led the contributors to this unwholesome position, while meat at 4.78 per cent contributed the least.

“The rise in food prices was largely attributable to increases in the prices of yams, potatoes, other tubers, fish, cereals, bread, meat, vegetables, fat, and oil.’

The LCCI, however, noted that core inflation has dropped to 18.84 per cent year-on-year in February 2023 from 19.16 per cent that was recorded in January 2023.