LCCI urges sustained focus on structural reforms despite dip in inflation rate

The Lagos Chamber of Commerce and Industry (LCCI) has called on the Nigerian government to maintain momentum in tackling the underlying structural causes of inflation, despite the recent moderation in the inflation rate.

Responding to the May inflation figure of 22.97 per cent released by the National Bureau of Statistics (NBS), the Director-General of the LCCI, Dr Chinyere Almona, issued a statement on Tuesday in Lagos advising caution and continued vigilance.

According to the NBS, the country’s headline inflation eased to 22.97 per cent in May, down from 23.71 per cent recorded in April.

Dr Almona acknowledged the decline as a welcome, albeit modest, shift in the inflation trend after several consecutive months of upward movement. She attributed the improvement partly to the Central Bank of Nigeria’s (CBN) sustained monetary tightening, which includes interest rate hikes and liquidity management measures.

However, she warned that this development must be approached carefully in light of persistent structural threats and the potential for food production and supply disruptions.

“The recent outbreaks of herdsmen-farmers conflicts in the middle-belt and ongoing flooding incidents are troubling signs that could severely impact food harvests this year,” Almona stated.

She further noted that logistics and supply chain challenges are likely to intensify due to continued conflict in the Middle East and the stalled ceasefire negotiations between Russia and Ukraine.

“The importation of fuel and other commodities may become costlier as global oil prices rise amid ongoing geopolitical tensions and trade disputes,” she added.

Almona stressed that these global and domestic shocks pose serious risks to food availability and pricing, potentially accelerating food inflation, which constitutes a major portion of the headline inflation index in the latter half of 2025.

She urged the government to take firm action by addressing insecurity, investing in resilient agricultural systems, and strengthening policy coordination to ensure that recent gains are both durable and inclusive.

In addition, Almona called for a coherent mix of fiscal and monetary policy strategies. She cited reforms in the oil and gas sector as having helped contain fuel price hikes earlier in the year, and recommended the continuation of policies such as the naira-for-crude exchange and mandated crude supply to local refineries.

The LCCI Director-General also advised the CBN to maintain a disciplined monetary stance while enhancing credit accessibility for productive sectors, particularly agriculture and manufacturing.

She underscored the need to uphold the suspension of Ways and Means advances to the government, regardless of any pressure to reverse the policy.

“There is an urgent need to ramp up support for dry season farming, expand irrigation infrastructure, and promote mechanised agriculture to reduce reliance on rain-fed farming,” she said.

Almona concluded by stressing the importance of tackling inefficiencies in the transportation of goods, especially food, from rural production areas to urban centres, noting that improvements in this area could lower market prices and reduce post-harvest losses.