LCCI advises FG to sustain reforms to spur economic growth

Lagos Chamber of Commerce and Industry (LCCI) has said President Bola Tinubu’s economic reforms, if sustained, have the potential to pull through critical deliverables for the economy to return to a growth path. LCCI said this in a statement on Tuesday by its director-general, Chinyere Almona, in reaction to the November inflation rate figure of 34.60 per cent. The National Bureau of Statistics put November core inflation at 28.75 per cent and food inflation at 39.93 per cent, respectively, against the October figures of 28.37 per cent and 39.16 per cent. Ms Almona said that while the country witnessed a weak impact of interest rates curbing inflation, a better performance of the reform measures implemented was expected to boost production.
She, however, noted that the persistent rise in inflation, reaching a 28-year record high of 34.60 per cent, fuelled a tense business environment as elevated prices constrained various business operations. The LCCI chief explained that the LCCI was concerned because, with the persistent and unabated rise in inflation, businesses should prepare to experience more stress from the burden of higher interest rates in the new year. “With the raging inflation rate, the unsuccessful attempt of the central bank to reduce the currency in circulation, and approaching a high-spending festive period, we are set to contend with even higher interest rates. The high inflation rate has far-reaching implications; one of its primary effects is reduced consumer spending.
High food and core inflation erode disposable income, reducing demand for non-essential goods and services and businesses also face increased business costs and shrinking profit margins. “While we are all confronted with a weak impact of interest rates on curbing inflation, we see a better performance of the reform measures implemented to boost production,” Ms Almona said. The LCCI director-general also mentioned that there was hope the country would witness more impact of the reforms on fundamental indicators like inflation, interest rates, and exchange rates. She also said that a coordinated effort was required to drive oil production to earn more foreign exchange needed to defend naira in the short term. Ms Almona further advised that a sound regulatory environment should support the recent investments entering the oil fields to sustain and attract more. “The renewed fight against terrorism, kidnapping, and all other vices that make our farms unsafe must be sustained with more funding. Nigeria must engage the use of intelligence and surveillance technology and the constitutional amendment to enable multi-level policing,” she stated (NAN)