Guardian Nigeria
The Lagos Chamber of Commerce and Industry (LCCI) has warned that the organised private sector (OPS) is in danger and has been thrown into a profound loan repayment crisis as interest rates adjust to new monetary policy rates. It also lamented that despite several hikes in the past months, Nigeria is yet to record a significant impact on price stability.
Director General, Dr Chinyere Almona, cautioned that the twin burden of high inflation and interest rates is overheating the economy and causing increased volatility and uncertainty.
It will be recalled that the Central Bank of Nigeria (CBN), this week, again, hiked the benchmark interest rate by 150 basis points to 26.25 per cent from 24.75 per cent, in a bid to curb steadily rising inflation. Inflation rose to 33.69 per cent in April from 33.20 per cent the previous month, according to the National Bureau of Statistics (NBS).
Almona said as inflation continues to rise despite various interventions by monetary and fiscal authorities, relevant authorities must take more decisive and multifaceted action to stabilise prices and support citizens’ purchasing power. She added that curbing inflation and stabilising prices are not easy steps to take in the drive for reasonable growth to create jobs and reduce poverty levels. She said there would be further reduction in demand as purchasing power weakens, and this would lead to lower industrial production and eventual loss of jobs.
“We wish to reiterate our position on the need to implement targeted fiscal and monetary interventions that can boost food production, lower the cost of doing business, overhaul transport infrastructure, increase investment in innovative security architecture driven with technology, create a more enabling environment for the power and oil and gas sectors, and boost non-oil exports.
“Specifically, we recommended that the CBN apply an import duty exchange rate lower than the official rate at a fixed rate for a determined period. This is expected to help businesses plan better and serve as a palliative that benefits a high proportion of the populace. Earlier in the year, we called on the government to implement specially targeted support for strategic industries,” she said.
Almona said the ongoing debate on a new minimum wage for workers is becoming a critical variable in the discourse about the next levels of government’s recurrent spending that may further fuel inflationary pressures in the second half of this year.
