Experts warn of looming job losses over galloping inflation
Job losses loom as a consequence of the current galloping inflation in the country, financial experts yesterday warned the Federal Government.
The soon-to-be expected lay-offs have been projected to start from consumer products’ companies and could also happen from this month onwards, as uncertainty over petrol prices and availability persist.
For the third consecutive month, reports from the National Bureau of Statistics (NBS), yesterday, showed that lingering structural and macroeconomic constraints resulted into further increase in the inflation from 12.8 per cent to 13.7 per cent.
Leading the surging index’s variables are electricity rates, kerosene prices, the impact of higher petrol prices and vehicle spare parts as largest contributors.
“These items as well as, other imported items continued to have ripple effects across many divisions that contribute to the core. The Index increased by 13.4 per cent in March, roughly 1.2 per cent points from rates recorded in March,” NBS said in the statement.
An investment banking firm, Eczellon Capital, in a note to The Guardian, said that the rising inflation has two basic implications for businesses and individuals.
“It will drive up the cost of borrowing for the government, which will manifest in form of higher yield on government securities as investors will demand higher returns to cover the risks associated with the new inflation status.”
“The value of the Naira worsened last week at the parallel market on the back of heightened demand from oil marketers, who would invade the segment in search of the forex. This is likely to remain in coming weeks due to inadequate forex supply.
“The upcoming Ramadan fast billed to commence in early June is typically associated with higher prices of food, pushing consumer prices further high,” the Associate Research at Eczellon Capital Limited, Mustapha Suberu, said.
“We believe that a more sustainable approach would be a comprehensive review of the nation’s foreign exchange policy to allow for adequate flexibility in the pricing of the naira,” he added.
Afrinvest Securities Limited noted that insisted policy inflexibility in forex market still constitutes a burden to importers and the approval granted marketers to source forex at secondary markets could pressure rate further at the parallel market.
All these factors, the experts concluded could force companies, which would normally want to stay afloat by reducing their work force.
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1 Comments
This administration is not just getting it right in the area of well articulated economic policies. The administration has failed in all the promises which even include the verbose talk of fighting corruption and recovering stolen funds. For four days, we have not had electricity in my area at Ajah, Lagos and i use a fuel powered generator. The cost i have incurred buying fuel to drive my two modest cars( for my wife and i) and then power the generator can only be imagined. To compare the fuel prices in Nigeria and countries like South Africa and Saudi Arabia where there is steady power supply, efficient transport system, and reasonable self sufficiency is simply a wrong analysis. We do not have any structured transport system and we are predominantly an import oriented consumer country. Even my uneducated uncle in the village knows that there is inflation even when put in elementary terms or understanding as price increases. There will be job losses and inflation in the short to long run will not abate unless there is a drastic improvement in the policies of this administration. A man who is not well educated can never come up with right leadership principles especially when it comes to formulating economic policies.A good example is Idi Amin. I really can not tell of Robert Mugabe’s educational background but he leads like a semi illiterate. A these illiterate leaders have educated men and women around them who turn out to operate like jigging fools. Why do we always have the wrong leaders in this country? It is really very shameful.
We will review and take appropriate action.