By Omolola Dede Adeyanju
The Lagos Chamber of Commerce and Industry (LCCI) has released a statement in respect to the November 2023 inflation rate. The statement signed by the Director General of the Chamber, Dr Chinyere Almona FCA, recommends policy mix for the Central Bank of Nigeria (CBN) to ensure currency stability.
It reads, “The Consumer Price Index (CPI) data released by the National Bureau of Statistics (NBS) revealed that inflation continues its upward trend, rising to 28.20 percent in November from 27.33 percent in the previous month, implying 0.87 percent points increase, and 6.73 percent points when compared to 21.47 percent recorded in the corresponding month of 2022. On a monthly basis, the Chamber notes the upward trend in consumer prices at 2.09 percent in November, having slightly moderated in the previous month at 1.73 percent.
“The upsurge in inflation is the highest since August 2005 and reflects continued Naira depreciation, higher fuel and food prices. Food inflation rate increased to 32.84 percent in the month, implying 1.32 percent points increase from 31.52 percent in the previous month and 8.72 percent points increase compared to 24.13 percent in the corresponding month of previous year. Core inflation on the other hand, declined by 0.19 percent point to 22.38 percent from the previous month, it however, increased by 4.39 percent points when compared to 17.99 percent in the corresponding month in 2022.”
In terms of contributions of items, the chamber noted the data showed that food and non-alcoholic beverages remained the highest contributor to the price increase at 14.61 percent followed by housing water, electricity, gas and other fuel (4.72 percent), clothing and footwear (2.16 percent), transport (1.84 percent) and furnishings & household equipment & maintenance (1.42 percent).
It further explained, “Following eleven consecutive months of acceleration, the battle against inflation must be intensified by the CBN. The Lagos Chamber of Commerce and Industry is concerned about the continued uptick in inflation and particularly notes that it offers investment disincentives to businesses, squeezes consumers’ income and spending, and constrains manufacturing productivity in the country.”
The statement also expressed that the chamber anticipates economic agents, including households and businesses, to continue to deploy strategies that will mitigate inflationary pressures, saying, “CBN is responsible for formulating and implementing monetary policies that foster currency stability. This involves a delicate balance between managing inflation, ensuring a competitive exchange rate, and promoting economic growth. Therefore, the CBN needs to adopt a well-calibrated policy mix that addresses the unique challenges facing the Nigerian economy.
“By promoting economic diversification, implementing effective interest rate policies, managing the exchange rate judiciously, and embracing inflation targeting, the CBN can contribute significantly to ensuring the stability of the Naira and fostering a robust and resilient economy.”
The chamber implored the government to address the challenges inhibiting domestic production and ease the bottlenecks to the distribution of goods within the country. Likewise, she urged the government to continue addressing the problems of insecurity and other factors affecting agriculture productivity in the country to improve food supply.
Recall the Chamber revealed that it shares similar views with the World Bank’s Nigeria Development Update (NDU), themed: “Turning the Corner, From Reforms and Renewed Hope to Results” which was launched on Wednesday, on the opacity and underperformance of the Nigerian National Petroleum Corporation (NNPC) and other Government-Owned Enterprises (GOEs).
It is worthy to note that as regards recommendations, the Chamber recommended that the government, in the short term, address the supply gap in the market and improve its forex earnings by declaring an emergency in oil & gas production.
“In the medium term, the government must strategically pursue and incentivise the local production of basic household needs that are being heavily imported in order to reduce the huge demand of FX. Further, there is a need to build market confidence around free FX pricing and implement policies to channel FX supply into the market.”
Also, the chamber urged CBN to intensify its efforts to address the challenge by adopting the right policy mix and ensuring synergy with fiscal authorities