With just about nine days to the Central Bank of Nigeria (CBN) Monetary Policy Committee’s (MPC’s) next meeting, the Lagos Chamber of Commerce and Industry (LCCI) has advised the apex bank to suspend interest rate hikes, especially the Monetary Policy Rate (MPR), to reduce the pressures on the supply side affecting inflation and mitigate the challenges of businesses and ordinary Nigerians.
The Director-General of the Chamber, Dr. Chinyere Almona, in a statement on Monday also urged the President Bola Tinubu-led administration to implement prudent fiscal policy measures in order to slowdown the surging inflation in the country.
According to her, the organized private sector (OPS) group is anticipating that businesses will implement a variety of cost reduction strategies to lower operating costs and strive for profitability amidst inflationary pressures, including downsizing and local sourcing of input factors to remain afloat.
The Director-General expressed the OPS group’s concern that households’ real income would continue to depreciate, especially in the near term, given the surging general prices level in the economy and the uncertainties about price movements in the near term.
Almona stated: “The Lagos Chamber of Commerce and Industry recommends that the government implements prudent fiscal policy measures.
“This is particularly in terms of borrowings as well as addressing the challenge of food inflation by immediately reducing and removing tax on basic food items to protect the most vulnerable”, she added.
On options for the government to mitigate the negative impacts of the rising inflation on Nigerians and businesses, the Chamber advised on the need for more palliatives to cushion the effect of the rising inflation on consumers, and also a pause in interest rate hikes.
The Director-General stressed: “We implore the government to hasten the provision of the anticipated palliatives to lessen the impact of the rising trend in prices on economic agents.
“Furthermore, we urge the Central Bank of Nigeria (CBN) to pause interest rate hikes to relieve the pressures on the supply side, especially at this time”, she added.
The National Bureau of Statistics (NBS) had last Friday released the Consumer Price Index (CPI) report for August 2023, which reflected that the nation’s inflation surged to 25.80% in the month by 1.72% points from the 24.08% recorded in the previous month.
The statistics agency mainly attributed the surge in inflation to Food and non-alcoholic beverages with 13.36% year-on-year increase followed by housing water, electricity, gas and other fuel (4.32%), and clothing and footwear (1.97%).food items In terms of contribution to the year-on-year inflation,
It would be recalled that the apex bank’s MPC had at its last meeting raised the benchmark interest rate (Monetary Policy Rate) by 25 basis points to 18.75% from 18.5% earlier, representing the highest interest rate over the past 22 years.
