LCCI REACTS TO JULY 2024 INFLATION RATE, CALLS FOR SUSTAINED POLICY INTERVENTIONS
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The Lagos Chamber of Commerce and Industry (LCCI) has responded to the latest inflation data released by the National Bureau of Statistics (NBS), which shows Nigeria’s inflation rate easing slightly to 33.40% in July 2024, down from 34.19% in June.
This marks the first reduction in inflation since December 2022, signaling a potential easing of price pressures attributed to a slowdown in demand and the impact of recent monetary and fiscal policies.
In a statement, the LCCI welcomed the slight moderation, noting that it offers some relief to the business community, which has been grappling with the challenges posed by high interest rates in recent months.
The Chamber expressed optimism that the actions taken by monetary and fiscal authorities are beginning to yield positive results, but urged the government to maintain and expand the cost relief measures that have been introduced to reduce the cost of doing business in Nigeria.
However, the LCCI also pointed out that core inflation, which slightly decreased from 27.49% in June to 27.47% in July, presents a complex scenario for policymakers. The Chamber emphasized the need for a carefully balanced policy mix to further decelerate inflationary pressures.
Additionally, the LCCI urged the government to use the current inflationary environment as an opportunity to address longer-term challenges in key sectors such as agriculture, manufacturing, and exports.
The Chamber called for sustained implementation of various programmes and policies aimed at controlling inflation and stabilizing the exchange rate. These include import duty waivers on essential goods like food and drugs, the introduction of Compressed Natural Gas (CNG) vehicles for cheaper transportation, foreign exchange market reforms, and efforts to boost local crude oil supply to refineries.
The LCCI highlighted the importance of transitioning to renewable energy as part of a broader strategy to enhance economic resilience.
Addressing food inflation, the LCCI stressed the need to tackle the root causes of food insecurity in Nigeria. This includes empowering small-scale farmers with access to information, technology, and agricultural inputs, as well as resolving land use conflicts, mitigating the effects of climate change, and investing in modern irrigation systems.
The Chamber also expressed concern over the Central Bank’s recent report indicating that the Purchasing Managers Index (PMI) for July fell to 49.7%, slightly below the optimism threshold of 50%.
The LCCI called for consistent policy measures to create a more stable and predictable business environment, which would boost industrial confidence in the coming months.
Moreover, the LCCI emphasized the importance of addressing the high prices of poultry, fisheries, and other food items that have been significant drivers of food inflation. The Chamber expects the newly established Ministry of Livestock Development to play a crucial role in increasing the supply of poultry and fisheries products to help stabilize prices.
Looking ahead, the LCCI expressed hope that increased funding for Local Government Areas would lead to grassroots development and urged subnational governments to replicate successful federal initiatives to generate a significant multiplier effect in the economy.
The Chamber also underscored the ongoing concerns about insecurity, which continues to affect investor confidence in Nigeria. It called for the sustained efforts of the armed forces to build on recent successes in combating insecurity.
Finally, the LCCI urged the government to support the productive sectors of the economy and to incentivize the production of exportable goods where Nigeria has a comparative advantage, as a strategy to boost foreign exchange earnings and maintain stability in the FX market.
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