LCCI decries current inflation rates of 18.12% in Nigeria

The Lagos Chamber of Commerce and Industry (LCCI) has decried the current inflation rate of 18.12 per cent in Nigeria, saying it is still very high.

Its Director-General, Dr Muda Yusuf, spoke with the News Agency of Nigeria (NAN) on Tuesday in Lagos, following the April inflation rates reported by the National Bureau of Statistics (NBS).

Yusuf said that the nation’s April inflation rate of 18.12 per cent was very high, in spite of the 0.5 per cent decline from the March 18.17 per cent figure.

NAN reports that food inflation also dropped to 22.72 per cent in April from 22.95 per cent reported in March.

This translated to 0. 23 per cent decline, while core inflation soared to 12.74 per cent from 12.67 per cent during the same period.

Yusuf said that food inflation at over 22 per cent was still very high, in spite of the marginal moderation in food prices in April 2021.

According to him, in spite of the five-basis points moderation in consumer prices, inflation rate remained high, as it doubled the Central Bank of Nigeria’s upper target range of nine per cent.

Yusuf said the impact of monetary interventions on agricultural output had been undermined by several structural constraints, including insecurity.

He said that the moderation was largely on account of the base effect of current drivers of inflationary pressures, inclusive of productivity challenges, worsening insecurity, persistent foreign exchange illiquidity and high energy costs.

“The Lagos Chamber of Commerce and Industry notes the marginal moderation (year-on-year) in headline inflation as domestic prices accelerated by 18.12 per cent in April 2021 compared to 18.17 per cent reported in the previous month.

“This is the first time the economy would witness a moderation in consumer prices since August 2019 when the Federal Government shut the land borders.

“The chamber notes the slight moderation in food prices on a year-on-year basis in April 2021 (22.72%) compared to 22.95 per cent reported in March 2021.

“However, food inflation at over 22 per cent is still very high in spite of the marginal moderation in food prices in April 2021.

“The situation has continued to impact the activities of every economic agent, including households, businesses and investors with profound impact on the citizenry, particularly the low and middle-income households.

“The high level of inflation continues to dampen consumer purchasing power at a time household income is not increasing in proportion to cost.

“High inflation environments also impact businesses in terms of rising production costs and depressed margins, making it increasingly difficult for corporations to deliver impressive returns to shareholders.

“This has implications for the sustainability of investment,” he said.

Yusuf was optimistic that the Monetary Policy Committee of CBN, set to meet next week, would concentrate on addressing the persisting inflationary pressure should the economy maintain its positive growth trajectory in the first quarter.

“Tightening policy stance by raising the monetary policy rate would naturally have implications for interest rates across key segments of the financial market.

“Overall, we believe effective synchronisation of fiscal and monetary policies is crucial in the fight against high inflation,” he said.