On the back of a soaring inflationary pressure, the Lagos Chamber of Commerce and Industry has called on the federal government to intensify efforts to tackle insecurity and foreign exchange challenges in the country.
The Director General of LCCI, Dr. Muda Yusuf, made the call in a statement on Wednesday.
He said there was a need to stabilise the foreign exchange market to reduce liquidity concerns, associated uncertainties, and disruptions in the economy.
The country’s headline inflation had risen to a record 46-month high after the figure for January 2021 inflationary pressure stood at 16.47 per cent.
Yusuf said, “The Lagos Chamber of Commerce and Industry notes with concern the continued uptrend in domestic consumer prices as headline inflation further accelerated to 16.47 per cent in January 2021, the highest since May 2017.
“The uptick in domestic prices was largely driven by the persistent food inflationary pressures, with food inflation hitting a record 20.57 per cent, the highest level since the 2009 CPI series began.”
However, he blamed the food index inflation on festive-induced demand for food items, which led to its rise in January 2021.
Yusuf asserted that the naira exchange rate depreciation and the forex liquidity challenges were two major drivers of core inflation pressures.
He worried that the consistent rise in domestic prices would profoundly impact entrepreneurs and the larger investing community.
“Higher prices translate to increased production costs for manufacturing companies, with consequent impact on their bottom-line since it is not in all situations that higher inputs cost can be transferred to consumers.
“This weakens the capacity of corporates to deliver value to shareholders via dividend payment amid dim profit prospects.
“Rising food prices would see most low, and middle-income households spend more on food commodities, with little amount to save and invest, thereby pushing more Nigerians below the poverty line,” Yusuf explained.