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By Merit Ibe
The Lagos Chamber of Commerce and Industry (LCCI) has said the increase in the monetary policy (MPR) rate will put pressure on businesses with the resultant effect of rising operating costs.
Director General of the chamber, Chinyere Almona, made the remark following the Monetary Policy Committee (MPC) resolve on January 23 and 24, to increase MPR to 17.5 per cent from 16.5 per cent, retain the asymmetric corridor of +100/700 basis points around the MPR, retain the CRR at 32.5 per cent and retain liquidity ratio at 30.0 per cent.
The chamber urged the CBN to look further inward at the peculiar situations driving inflationary pressures within the Nigerian economy.
“Rate hikes are known to weaken growth and as such, it is expected that the monetary and fiscal authorities intervene with policies and instruments that are growth-boosting. We are also calling on the government to commence preventive measures against the expectation of flooding in 2023.
“This was our major concern regarding the implementation of more taxes, as provided in the 2022 Finance Bill. We urge the government to consider streamlining these issues such that they do not swamp businesses and render them unproductive and uncompetitive.”
Almona opined that beyond the rate hikes, policymakers need to consider more actions to increase and stabilie oil production levels to earn more FOREX, adding that better coordination of fiscal policies can complement the deployment of monetary instruments by the CBN.
She advised that businesses should look inwards to source their raw materials instead of waiting for the CBN to allocate FOREX to them.
“We have consistently advocated for a more friendly policy/business environment that will attract foreign and domestic investment and improve productivity (particularly domestic food production).
“While we commend recent strides in dealing with insecurity, we ask for more deployment of technology and surveillance apparatus, particularly as we approach the general elections in weeks.
“Weak power supply, scarcity of FOREX and expensive logistics due to fuel scarcity are critical issues that must be closely watched and attended to with effective policies and fiscal instruments.
