The Lagos Chamber of Commerce and Industry (LCCI) has advised the Central Bank of Nigeria (CBN) to suspend interest rate hikes to relieve the pressures on the supply side affecting inflation.
In a statement on Monday, signed by the Director-General, Dr Chinyere Almona, while reacting to the recent inflation report of 25.80 per cent released by the National Bureau of Statistics (NBS), the LCCI urged the FG to implement prudent fiscal policy measures.
The chamber also said businesses operating in Nigeria are expected to adopt more cost-cutting strategies including downsizing staff count and also more local sourcing of raw materials to deal with the rising inflation.
It said it was anticipating that businesses will implement a variety of cost reduction strategies to lower operating expenses and maintain profitability amidst inflationary pressures, including downsizing and local sourcing of input factors to remain afloat.
The LCCI also noted that households’ real income would continue to experience a decline, especially in the near term.
It further said it was concerned about the rise in inflation (year-on-year) driven by the increase in both the food and core components of the CPI and also the indication that the path of price movements remains unclear in the near term, she added:
“The Lagos Chamber of Commerce and Industry recommends government implement 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,” the statement read in part.
The LCCI also called for palliatives to cushion the effect of the rising inflation on consumers, and also a pause in interest rate hikes.
“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.”
