BY OLUSHOLA BELLO, Lagos
The Lagos Chamber of Commerce and Industry (LCCI) has expressed worry over the rising cost of consumer goods in the country.
The chamber, in a statement made available to LEADERSHIP, expressed its reaction to the latest inflation figure released by the National Bureau of Statistics (NBS).
The director-general of LCCI, Dr Muda Yusuf stated, “the Chamber 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 Consumer Price Index (CPI) series began”
He noted that the consistent rise in domestic prices have profound implications for entrepreneurs and the larger investing community, saying that higher prices translate to increased production costs for manufacturing companies, with consequent impact on their bottom-line since it is not in all situation that higher inputs costs can be transferred to consumers.
According to Yusuf, this weakens the capacity of corporates to deliver value to shareholders via dividend payment amid dim profit prospects.
He also said, “rising food prices would see most low and middle-income households spend more on food commodities, with little amount to save and/or invest. Persistent rise in food prices, if unresolved, would worsen Nigeria’s poverty situation, thereby pushing more Nigerians below the poverty line.
He explained further that rising domestic prices mean deepening negative real returns on investment securities such as treasury bills, bonds, among others, even as yields on these instruments are unattractive relative to emerging market peers.
On way forward, the LCCI DG stated that government authorities at national and sub-national levels should address security concerns in the country, due to its scale of importance as far as food production is concerned in Nigeria and easing logistics costs in the economy.
He also said the need to stabilise the foreign exchange market to reduce liquidity concerns and associated uncertainties and disruptions in the economy; the need to expeditiously resolve port challenges and related bottlenecks, which is negatively affecting production flows in the country; and strict adherence to the statutory limit of CBN overdrafts to the government going forward is imperative.