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By Merit Ibe, [email protected]
The Lagos Chamber of Commerce and Industry (LCCI) has expressed concerns over the unabated inflationary pressures which have continued to distort the economy, making business and investment planning a huge challenge.
The chamber noted that recent data released by NBS indicates a worrying trend, with the headline inflation rate peaking at 31.70% in February, marking a significant increase from the previous month’s rate of 29.90%.
The Director General of the chamber, Chinyere Almona, viewed that the seemingly weak interventions by the government in curbing the rising trend of headline inflation are disturbing to the business community.
Almona thus called on various interventionst machiney of the government to administer more potent policies and support measures to rescue the economy from the brink.
“The inflationary surge, particularly in food prices, poses a significant challenge to the economic well-being of Nigerians. In February 2024, food inflation soared to 37.92% year-on-year, driven notably by increases in prices of essential commodities such as bread, cereals, potatoes, yam, fish, oil, meat, fruits, coffee, tea, and cocoa. Such inflationary pressures exacerbate the already precarious living conditions for millions of Nigerians, amplifying social and economic vulnerabilities.”
The chamber, however, lauded the steps taken by the Central Bank of Nigeria (CBN) regarding fertilizer access to farmers across the country through the Federal Ministry of Agriculture and Food Security, to reduce the burden of high cost of fertilizers to them.
The Director General advised that more direct and targeted interventions should be focused on agricultural mechanization, the adoption of lower import duty exchange rates used for the import of agricultural input, and the establishment of more agro-industrial hubs across the country.
The chamber recommended that to address the rising inflationary trend and foster economic stability, government needs to prioritize small holder farmers and vulnerable groups, including women and youth, for targeted assistance.
It further advised that there should be strong collaboration between the CBN, Federal Ministry of Agriculture and Food Security, State Ministries of Agriculture, agricultural extension services, research institutions, and farmer cooperatives.
“Allocate resources for agricultural extension services to provide technical assistance and training to farmers through their cooperatives on optimal fertilizer application techniques and to promote the adoption of climate-smart agricultural practices to enhance resilience to environmental challenges.
“Promote the integration of fertilizer distribution with other agricultural value chain interventions, such as improved seeds, irrigation, and post-harvest management.
“Support further expansion of local fertilizer production capacity to reduce dependency on imports and enhance long-term sustainability.
“Utilize information and communication technologies (ICTs) to disseminate agricultural advisory services, market information, and weather forecasts to farmers.
“Empower farmer cooperatives and associations to play a central role in the distribution and management of subsidized inputs and access to finance. “Urgent measures are needed to improve transportation infrastructure, including road networks, to reduce the cost of transportation and mitigate inflationary pressures across various sectors of the economy.
“Efforts should be intensified to strengthen agricultural value chains, including the establishment of more storage facilities and the promotion of agro-processing industries to reduce post-harvest losses and enhance food security.”
She noted that the chamber is optimistic that if the government harmonizes its fiscal and monetary instruments to tackle the cost of agricultural production, enhance food processing, and sustain the fight against insecurity, inflationary pressures may soon begin to abate, and other economic variables can begin to record positive indicators. “By implementing targeted interventions and fostering a conducive policy environment, Nigeria can overcome the current inflationary challenges and chart a path towards inclusive growth and prosperity for all.” This is even as the chamber commended the federal government over its action to cut the cost of governance, noting that the measures to manage the cost of governance, are a positive step towards a more economically stable Nigeria.
The chamber viewed that considering the current economic challenges facing the nation, including soaring inflation and high living costs exacerbated by the removal of petrol subsidies and forex market crises, the government must take decisive action to cut unnecessary expenses and even reduce statutory expenditures, where possible.
Almona said the decision to temporarily halt public-funded foreign trips aligns with the urgent need to prioritize cost-saving measures without compromising the effectiveness of governance.
By this suspension, she advised that the government can redirect valuable resources towards more pressing priorities, including infrastructure development, social welfare programs, and economic stimulus initiatives.
Almona opined that the government at all levels and tiers should initiate similar actions to cut the cost of governance within their jurisdictions. “We strongly urge the Federal Government and states to make public the amount of funds rescued from these cost-cutting initiatives. This commitment to public accountability will reassure citizens and companies, fostering a sense of trust and confidence in the government’s financial management.
“We also encourage fiscal transparency, including the exact figures allocated to statutory transfers in the government budgets and amounts allocated for constituency projects undertaken by legislators in the National Assembly.”
