Nigeria’s inflation has been on a steady rise since September 2019 when land borders were closed for business.
Nigerian business associations have raised concerns about the alarming rise in inflation in the country and urged the Federal Government to take appropriate measures.
The country’s annual inflation rate jumped to its highest in two years with 12.26% (year-on-year) recorded for March 2020.
According to a report published by the Nigeria Bureau of Statistics (NBS) on Tuesday, April 21, 2020, the consumer price index (CPI), which measures inflation, increased by 0.06 percent points higher than the 12.20% recorded in February 2020.
The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, said the rising inflation will affect the prices of goods and greatly impact profit margins in the coming months, according to a report by The Punch.
“The bigger worry is about the outlook for inflation in the next few months.
“Expectedly, we are already witnessing a sharp depreciation in exchange rate as a consequence of the slump in crude oil price,” he said.
He warned that major adjustments have to be made in both the private and public sectors of the Nigerian economy, with reviewed economic management models a pressing need.
The Director-General of Nigeria Employers’ Consultative Association (NECA), Dr Timothy Olawale, noted that the inflation situation is not helped by the ongoing coronavirus pandemic that has infected over 2.6 million people across the world.
As of April 22, Nigeria has recorded 873 coronavirus cases in 25 states and the Federal Capital Territory (FCT), Abuja, with 28 already dead.
Many social and economic activities have been disrupted to combat the spread of the virus, with many states across the country already on lockdown.
Olawale warned that the disruption of the coronavirus as well as other factors such as the drop in crude oil prices and uncertainty in the financial markets could land Nigeria in another recession very soon.
He said, “With the lockdown and closure of businesses, it is believed that recession looms in the economy amidst the rapid spread of COVID-19 pandemic.
“There are limitations to the successes that can be recorded when demand shocks are combined with supply shocks.
“It is already apparent from the emergence of the current crisis that there are implications on the economy from both the demand and supply sides.”
The NECA DG called on the government to design policy measures that will deflate the inflation rate and shield Nigerians from crippling economic consequences.
The president of the Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, also expressed concerns that the rise in inflation will spell more hardship for ordinary Nigerians.
“We import most of the things, and we operate a mono-economy which depends only on oil,” he said.
He called on the government to aggressively develop the agricultural sector and support the Small and Medium Enterprises in the country.
The current upward rise in inflation started in September 2019 around the time President Muhammadu Buhari closed Nigeria’s land borders allegedly because of the activity of smugglers.
Source: Pulse Nigeria
