The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Dr Chinyere Almona, has decried the tense business environment, which she said is set to worsen with the current increase in interest rates.
Lamenting the deep-rooted challenges that are all contributing to galloping inflation, particularly in food and core inflation categories, she said the chamber is extremely concerned that food inflation surged to 37.52 per cent year-on-year, with core inflation reaching 27.58 per cent, both of which is putting severe pressure on the purchasing power of Nigerians.
Almona went on to add that beyond the pains of petrol price hikes, a bigger problem is the controversies about the pricing dynamics of both imported and locally refined petroleum products. “It is disturbing to note that the Nigerian National Petroleum Corporation Limited (NNPCL) and the Dangote Refinery have not wholly resolved terms of collaboration for the good of the country. The excuse by the CBN that the monetary policy rate was raised on fears of a petrol price hike is not a sustainable argument. We expect the government to tackle the issues to benefit the Nigerian economy promptly.”
Regretting that energy and transportation prices have significantly contributed to core inflation, she urged the government to accelerate energy reforms to improve electricity generation, reduce reliance on costly diesel and petrol and ensure stable power supply for manufacturers and SMEs.
“The transition to renewable energy sources should be prioritised to reduce production costs and improve the transportation infrastructure to cut logistics costs. Investment in rail and road networks will ease the transportation of goods as well as reduce price volatility in consumer markets. We expect to see quick actions on the adoption of CNG mobility in Nigeria.”
She added that the volatility in the exchange rate market has amplified inflationary pressures by raising the cost of imported goods and services. Calling for a more transparent foreign exchange management to reduce speculation and stabilise the naira, she said a stable FX will help moderate imported inflation, especially in essential commodities and raw materials needed for local production.
“We reiterate our earlier recommendation that the CBN should work with the Nigeria Customs Service (NCS), to fix the import duty exchange rate for a certain period to aid business decisions on importation,” she stated.