By Merit Ibe
The Lagos Chamber of Commerce and Industry (LCCI), has called on the Central Bank of Nigeria (CBN) to pause its interest rate hike to relieve Nigerians the pressure on the supply side following increased inflation rate.
In the recent Consumer Price Index (CPI) data released by the National Bureau of Statistics (NBS), inflation rate (year-on-year) rose to 25.80 per cent in August from 24.08 recorded in July, implying eight consecutive months increase and the highest since September 2005.
Director of the chamber, Dr Chinyere Almona stated that the chamber is concerned about the uptick in inflation (year-on-year) driven by increase in both the food and core components of the CPI.
However, Almona noted that the slow pace of headline inflation month-on-month may be an indication that the path of price movements remains unclear in the near term. As a result, the chamber anticipates businesses will implement a variety of cost reduction strategies, including downsizing and local sourcing of input factors as they bid to lower operating expenses.
“Also, household real income will continue to experience decline, especially in the near term.”
She recommended that the government should implement prudent fiscal policy measures particularly in terms of borrowings as well as address the challenge of food inflation by immediately reducing/ removing tax on basic food items to protect the most vulnerable.
“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.”
Giving the analyses, the chamber explained that the increased inflation rate represents 1.72 per cent points higher than the previous month and 5.28 per cent points when compared to 20.52 recorded in the corresponding month in 2022.
“On a month-month basis, inflation, however, moderately increased to 3.18 per cent, 0.29 per cent points rise compared to the 2.9 per cent surge in the previous month.
Food inflation rate increased to 29.37 percent, implying 2.36 percentage points increase when compared to 26.98 percent the previous month and 6.22 per cent points increase compared to 23.12 per cent points in the corresponding month in 2022.
“Similarly, core inflation increased to 21.15 percent, 0.68 per cent points and 4.03 per cent points increase when compared to 20.47 per cent in July 2023 and August 2022 respectively. In terms of contributions of items, the data revealed that food and non-alcoholic beverages contributed the highest to the price increase at 13.36 per cent followed by housing water, electricity, gas and other fuel (4.32 per cent), clothing and footwear (1.97 per cent), transport (1.68 per cent) and furnishing & household equipment & maintenance (1.30 per cent).”