The Lagos Chamber of Commerce and Industry (LCCI) has predicted that inflation would sustain an upward trajectory for the rest of 2020, noting that the increase would have serious implications for businesses regarding production cost, investment real return date and overall economic performance.
LCCI President, Toki Mabogunje, at a briefing on the state of the nation, added that, according to official statistics, inflation rose by 13.22 percent year-on-year in August 2020, its highest level since April 2018.
She said the major drivers of inflation are structural factors, which are beyond the purview and control of monetary authorities, pointing out that the combination of food supply shocks, foreign exchange restrictions on food and fertiliser imports, higher energy cost electricity and petrol, exchange rate adjustment, poor infrastructure, and insecurity in major food-producing states would pressurise domestic price level in the near term.
She said: “We note the adverse implications of rising inflation for households, businesses, investors, and the economy at large. The Lagos Chamber calls on the fiscal and monetary authorities on the need to synergise to moderate domestic prices to a level conducive for sustainable and inclusive economic growth.”
She called on the Federal Government on the need to reopen the land borders to give succour to food prices in the light of lower domestic food supply amid huge demand for food.
“On monthly basis, consumer prices accelerated by 1.34 percent in August 2020 compared to 1.25 percent in the preceding month. The persistent pressure on consumer prices stems largely from the sustained uptrend in food inflation,” she added.
“According to reports, over two million tons of rice were lost to flood. Other crops such as sorghum, corn and millet were also affected. This situation, if not expeditiously addressed and managed, would escalate the pressure on food prices, thereby putting the country on the verge of a food crisis,” she warned.
She said to ensure a better investment environment for the advancement of the economy and the good of investors and economic players is a collective responsibility, stating that it is critically important to have the right fiscal, monetary, and regulatory framework.
“There is need for our policymakers to formulate and implement policies that facilitate business continuity particularly this time business operators are grappling with the devastating impact of the pandemic. Policies that harm businesses and scare investors should be discouraged. Our policies must foster economic competitiveness at national and sub-national level, support businesses, protect jobs and preserve investment,” she said.
She assured that the chamber would continue to engage government agencies, on evolving policy issues that might affect the business environment.
