Industrial firms worry over rising inflation, survival

Manufacturers and industry stakeholders have again expressed concern over rising inflation, saying the situation would lead to the closure of more businesses.

In October 2024, headline inflation jumped to 33.88 per cent from 32.7 per cent in September. month-on-month, the headline inflation was 2.64 per cent showing strength.

The National Vice President of the National Association of Small-Scale Industrialists (NASSI), Segun Kuti-George, said the situation is a cause for concern. He pointed out that the multiple interest rate hikes by the Central Bank of Nigeria (CBN) have not led to a corresponding decrease in inflation.

He said while looking for long-lasting solutions to inflation, the foreign exchange rate needs to be fixed at a reasonable level to significantly crash the cost of goods. He was worried that manufacturers were on the edge as they did not have the allowance to increase prices further.

Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Sola Obadimu, decried the fact that credit access to businesses would continue to suffer even more as no commercial bank lends below the monetary policy rate (MPC).

“We are not in a demand-pull economy where demand outweighs supply. All input costs for businesses are rising so they are in turn going to raise the cost of goods even more and they are not doing so because there is elastic demand. Demand has dropped because people’s purchasing power is gone.

“The more interest rates are raised to tackle inflation, the more the situation is aggravated for businesses and consumers as manufacturers cannot price goods below production costs,” he said.He said the high inflation rate is driving up production costs, causing the cost of goods to skyrocket.

“Demand is shrinking as we have seen and truthfully, no manufacturer is happy to increase prices because demand is poor. The outlook is not bright at all,” he said.

President of the Association of Small Business Owners in Nigeria (ASBON), Femi Egbesola, regretted that the steady rise in inflation would lead to faster closure of more businesses.