The Director-General, Lagos Chamber of Commerce and Industry, Mr Muda Yusuf, has said there is a need to boost productivity, reduce costs of logistics, and address production cost issues which are affecting inflation in the country.
Yusuf said this while commenting on Nigeria’s inflation rate, which rose to 12.82 per cent in July, according to latest figures released by the National Bureau of Statistics.
The NBS had, in its Consumer Price Index July 2020 report released on Monday, stated that the consumer price index, which measures inflation, increased by 12.82 per cent (year-on-year) in July.
This is 0.26 per cent higher than the rate recorded in June 2020 (12.56) per cent.
Yusuf said, “We need to worry about mounting pressures arising from price increases and cost escalation. The bigger issues are supply side challenges.
“We need to boost productivity, reduce costs of logistics, and address production cost issues, especially energy cost.”
Noting that the spike in the inflation figures was expected, he said it was however a pleasant surprise that the figures were not higher than what was reported by the NBS.
He said, “They don’t seem to reflect the reality of the high prices being currently experienced both by businesses and households.
“The key drivers of inflationary pressures on food items include the high transportation costs, disruptions of agricultural production by the rising insecurity, high cost of labour, weak productivity, rural urban migration, and extortion of delivery vehicles on the road, among others.”
Yusuf said it was also surprising that core inflation, which was typically driven by import prices, recorded a slight reduction in July.
“The expectations was that with the sharp depreciation in the naira exchange rate, the forex liquidity challenges, and the high import dependence of the economy, core inflation should have been much higher than what the NBS reported,” he said.
According to the LCCI DG, the NBS actually reported a decrease in core inflation, and these were some grounds on which to interrogate the NBS inflation numbers.
