Inflation, insecurity will push more Nigerians below poverty line, LCCI warns

The Lagos Chamber of Commerce and Industry (LCCI) has warned that more Nigerians may be heading below the poverty line if the federal government fails to tackle issues of insecurity which has prevented farmers from going to their farms, and also the rising inflation.

In a statement by the Director-General of LCCI, Dr. Muda Yusuf, FG needs to stabilize the nation’s FX to improve liquidity for businesses, alongside easing business bottlenecks in Nigeria’s infrastructure value chains, citing that Nigeria’s unstable FX policy and fiscal deficit by the Central Bank are also responsible for the rising inflation.

He warned that the rising food prices would be a concern for low-income households in Nigeria and urged the FG to tackle Nigeria’s insecurity issues to stem the rising food inflation.

“Rising food prices would see most low and middle-income households spend more on food commodities, with little amount to save and/or invest, thereby pushing more Nigerians below the poverty line.

“The Lagos Chamber of Commerce and Industry notes with concern the continued uptrend in domestic consumer prices as headline inflation further accelerated to 16.47 per cent in January 2021, the highest since May 2017,” he said.

“The uptick in domestic prices was largely driven by the persistent food inflationary pressures, with food inflation hitting a record 20.57 per cent, the highest level since the 2009 CPI series began.

“Higher prices translate to increased production costs for manufacturing companies, with consequent impact on their bottom-line since it is not in all situations that higher inputs cost can be transferred to consumers. This weakens the capacity of corporates to deliver value to shareholders via dividend payment amid dim profit prospects,” he added.

“Government authorities at national and sub-national levels should address security concerns in the country, due to its scale of importance as far as food production is concerned in Nigeria,” he said.

The LCCI had earlier warned that Nigeria’s inflation rate, which had risen for 15 consecutive months, would continue its climb by 2021.