Lagos Chamber of Commerce and Industry (LCCI) has decried the steady rise in inflation in the country since September 2019. This was even as the chamber bemoaned the state of the economy, saying private investment inflow and other macro-economic challenges were slowing down its growth.

President of LCCI, Toki Mabogunje, who made the revelation at the first edition of “State of the Economy for 2020,” noted that despite sustained recovery of the economy, growth remains fragile. Expressing discontent, LCCI said the nation’s economy was still vulnerable to external shocks like fluctuations in global oil prices, which partly explains why two global credit agencies – Moody and Fitch, recently downgraded Nigeria’s economic outlook from stable to negative on the back of slow fiscal growth and increasing vulnerability to exogenous shocks.

Noting that the rising inflation had a profound welfare effect on citizens as it weakens purchasing power, Mabogunje said heightened food inflation naturally escalates poverty conditions as food is basic to human existence.

She noted that intense inflationary pressures have a negative impact on investment as cost of production and business operations increase, adding that this typically takes a toll on profit margins as sales and turnover decline.

She pointed out that the country’s inflation closed at the end of December 2019 at 11.98 percent, making it the fourth consecutive month of rising inflation, adding the mono-product nature of the economy would continue to expose the nation to volatility in the global oil market with its attendant consequences on the economy.

“We note the sustained uptick in headline inflation since September 2019.

Related News

“According to the NBS, inflation rose to 11.98 percent in December. This marks the fourth consecutive month of rising inflation.

“Both food and core inflation accelerated to 14.67 percent and 9.33 percent respectively in December. Policy makers need to worry about the increasingly intense inflationary conditions, especially the food component of inflation.

“Rising inflation has a profound welfare effect on citizens as it weakens purchasing power. Heightened food inflation naturally escalates poverty conditions as food is basic to human existence.  “Intense inflationary pressures also have a negative impact on investment as cost of production and business operations increases.

“This typically takes a toll on profit margins as sales and turnover declines. We believe government can stem rising consumer prices through increased investment in infrastructure, especially power and transportation.

“This would help to bridge supply gaps and reduce transportation costs. Similarly, there is need to address the security concerns in major food-producing areas of the country,” she said.