Nigeria’s private sector has decried the high cost of production in the country due to inflation.
In a statement on Monday, the sector observed that what the inflation trend meant to many Nigerians within the middle class, particularly those in the lower rung of the ladder, was that their capacity to live a decent life is under constant threat, resulting in gradual decline in the standard of living.
The statement read in part, “The rapid drop in purchasing power is not limited to individuals alone; corporate organisations are equally experiencing erosion in capacity to increase productivity due to the impact of galloping inflation on their resources.
“For the Organised Private Sector, the inflation is also impacting the cost of input into their production, while they have been constrained to increase the prices of their products to reflect the inflation in the economy.”
At a media briefing earlier this month, the Group Executive Director of Dangote Industries Limited, Edwin Devakumar, had said that Dangote Cement Plc did not increase the price of cement in the past 16 months, despite the continuous rise in the cost of production and surge in the demand for cement.
Nigeria’s inflation rose to 18.17 per cent in March, peaking at s three-year high and representing 19 consecutive months of increase. This forced more manufacturers of consumables to re-adjust their projections for the year.
Devakumar said Dangote Cement had consistently maintained same ex-factory price for its products.
However, according to the private sector, in other sectors of the economy such as medicare and fast-moving consumables, many manufacturers have been forced to hike price commensurate with the prevailing inflation rate.
Some manufacturers stated that they had resorted to reducing quantities to stay afloat in the face of their inability to raise price.
The statement added, “Many manufacturing firms are also slashing production due to their inability to procure dollar for raw materials. Also, they are being pummelled by the rising cost of energy, transportation and cost of machinery as a result of the devaluation of the local currency.”
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