Sustained rise in price levels weakening purchasing power –LCCI

By Merit Ibe

The Lagos Chamber of Commerce and Industry (LCCI), has said sustained rise in the general price level in recent times has caused weakening in purchasing power.

The Chamber made the remark following a report by  the National Bureau of Statistics (NBS), that the January 2023 headline inflation inched up by 0.47 per cent to 21.83 per cent after shedding a few basis points in December 2022.

Director General of the Chamber,  Dr Chinyere Almona, said the increase in core inflation is as a result of higher prices of solid fuel, lubricants, air transport, liquid fuel and gas, noting that  rise in the general price level was coming at a time when multidimensional poverty has climbed too high with an unprecedented 133 million Nigerians living below the poverty line (NBS).

“The impact of rising inflation is far-reaching. It distorts fixed interest rate payments for recipients and payers alike, leaving in its trail disruptions and dislocations in the economy.

While the monetary authority keeps hiking rates to beat inflation and exchange-rate correction measure, Almona noted that  the supply side should also be explored with the same if not more vigour, adding that other contractionary monetary and fiscal policies should be equally deployed to tame inflation.

She urged the CBN to also check the extent of its monetary financing of the Federal Government through ways and means. 

Notable contributors to the figure include bread and cereals (21.67 per cent), actual and imputed rent (7.74 per cent), potatoes, yam and tuber (6.06 per cent), vegetable (5.44 per cent) and meat (4.78 per cent).

Food index went up to 24.32 per cent from 23.75 per cent in the same period. The rise in food prices is largely attributed to increases in the prices of yams, potatoes, other tubers, fish, cereals, bread, meat, vegetables, fat and oil. The non-food index rose to 19.16 per cent in January 2023 from 18.49 per cent recorded in December 2022.

The increase in core inflation is as a result of higher prices of solid fuel, lubricants, air transport, liquid fuel and gas.”