The Lagos Chamber of Commerce and Industry (LCCI) is gravely concerned about the persistent rise in inflationary pressures in the Nigerian economy. Recent data released by NBS indicates a worrying trend, with the headline inflation rate reaching 31.70% in February 2024, marking a significant increase from the previous month’s rate of 29.90%. The seemingly ineffective interventions by the government in curbing the rising trend of headline inflation are disturbing to the business community. The unabated inflationary pressures have continued to distort the workings of the economy and making business and investment planning a huge challenge.
The inflationary surge, particularly in food prices, poses a significant challenge to the economic well-being of Nigerians. In February 2024, food inflation soared to 37.92% year-on-year, driven notably by increases in prices of essential commodities such as bread, cereals, potatoes, yam, fish, oil, meat, fruits, coffee, tea, and cocoa. Such inflationary pressures exacerbate the already precarious living conditions for millions of Nigerians, amplifying social and economic vulnerabilities.
The LCCI lauds the step taken by the Central Bank of Nigeria (CBN) regarding fertilizer access to farmers across the country through the Federal Ministry of Agriculture and Food Security to reduce the burden of high cost of fertilizers to them. More direct and targeted interventions should be focused on agricultural mechanization, the adoption of lower import duty exchange rates used for the import of agricultural input, and the establishment of more agro-industrial hubs across the country.
Considering the foregoing, the LCCI recommends the following strategies to address the rising inflationary trend and foster economic stability:
·       Prioritize smallholder farmers and vulnerable groups, including women and youth, for targeted assistance.
·       There should be strong collaboration between the CBN, Federal Ministry of Agriculture and Food Security, State Ministries of Agriculture, agricultural extension services, research institutions, and farmer cooperatives.
·       Allocate resources for agricultural extension services to provide technical assistance and training to farmers through their cooperatives on optimal fertilizer application techniques and to promote the adoption of climate-smart agricultural practices to enhance resilience to environmental challenges.
·       Promote the integration of fertilizer distribution with other agricultural value chain interventions, such as improved seeds, irrigation, and post-harvest management.
·       Support further expansion of local fertilizer production capacity to reduce dependency on imports and enhance long-term sustainability.
·       Utilize information and communication technologies (ICTs) to disseminate agricultural advisory services, market information, and weather forecasts to farmers.
·       Empower farmer cooperatives and associations to play a central role in the distribution and management of subsidized inputs and access to finance.
·       Urgent measures are needed to improve transportation infrastructure, including road networks, to reduce the cost of transportation and mitigate inflationary pressures across various sectors of the economy.
·       Efforts should be intensified to strengthen agricultural value chains, including the establishment of more storage facilities and the promotion of agro-processing industries to reduce post-harvest losses and enhance food security.
The Chamber is optimistic that if the government harmonizes its fiscal and monetary instruments to tackle the cost of agricultural production, enhance food processing, and sustain the fight against insecurity, inflationary pressures may soon begin to abate, and other economic variables can begin to record positive indicators. By implementing targeted interventions and fostering a conducive policy environment, Nigeria can overcome the current inflationary challenges and chart a path towards inclusive growth and prosperity for all.
DR CHINYERE ALMONA, FCA
DIRECTOR GENERAL
LAGOS CHAMBER OF COMMERCE & INDUSTRY
19TH MARCH 2024
