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The Lagos Chamber of Commerce and Industry (LCCI) has said the current Russia-Ukraine war will trigger shocks in the manufacturing and agricultural sectors in the second quarter of 2022.
Dr Michael Olawale-Cole, President, LCCI, said this at the LCCI Quarterly press conference on the state of the Nigerian economy on Tuesday in Lagos.
Olawale-Cole said the ongoing war triggered a positive oil price shock with spillover effects on operating costs, raw materials, and inflation in countries not directly engaged in the war. He noted that Nigeria was not an exception as prices of goods and services were moving northwards with the potential implication for shrinking production of goods and services. The LCCI president stressed that should the conditions persist, production volumes would be impacted by the raw materials supply chain disruptions, the rising cost of diesel, and other internal security crises.
“Job losses are also very likely due to constrained production and disrupted supply chains and all of these will likely depress growth potential in Q2 2022.
“Going into the second quarter of 2022, the manufacturing sector will likely suffer some shocks from the rising cost of diesel, logistics, foreign exchange illiquidity, domestic inflationary pressure, weakening purchasing power, poor public infrastructure and port-related challenges.
“These may continue to present as headwinds to the sector’s performance. “Additionally, with the war in Ukraine aggravating disruptions to supply chains of raw materials like wheat, barley, soybeans, sunflower, and corn, the rising cost of production may not abate soon,” he said.
