The Centre for the Promotion of Private Enterprise (CPPE), a leading organized private sector advocacy groups in the country, has advised the Federal Government on sundry areas requiring its intervention in order to frontally tackle the surging inflation rate in the country.
The Founder/Director General of the group, Dr. Muda Yusuf, in a statement issued on Wednesday in relation to the 21.09% inflation rate in October published by the National Bureau of Statistics (NBS) on Tuesday, charged the government to address the challenges bedeviling the supply side of the economy, as well as production and productivity constraints causing the rising price level.
The expert also canvassed the fixing of the dysfunctional forex policy, institution of fiscal reforms to curb escalating deficit spending and to give producers and citizens some relief.
For instance, the seasoned economist and former Director General of Lagos Chamber of Commerce and Industry (LCCI) “the government could tweak the tariff policies by granting concessionary import duty on intermediate products for industrialists, especially those in the food processing segments of the agriculture value chain.”
He pointed out that evidently there had not been any abatement to the key factors which are largely structural and policy issues fueling inflation in the country.
The private sector advocate listed some of the factors as including the depreciating exchange rate, rising transportation costs, logistics challenges, forex market illiquidity, hike in diesel cost, climate change, insecurity in many farming communities and structural bottlenecks to production.
The economist said: “These are largely supply side and policy concerns. Monetary policy tightening in most economies around the world, especially the leading economies, is also driving imported inflation and the depreciation in the exchange rate.
“The accelerated growth in fiscal deficit financing by the CBN is heightening liquidity in the economy with consequences for soaring inflation.”
The CPPE boss identified some of the consequences of the mounting inflationary pressures for the economy as weakening of purchasing power of citizens as real incomes are eroded, increasing poverty incidence, and escalation of production costs which negatively impacts profitability.
Others are, erosion of shareholder value in many businesses, weakening of investors’ confidence, and decline in manufacturing capacity utilization.
