CBN Restricts Banks From Using Forex Gains For Dividends

LCCI Urges CBN To Pause Interest Rates As Inflation Hits 25.80%

3 mins read

The Lagos Chamber of Commerce and Industry (LCCI) has called upon the Central Bank of Nigeria (CBN) to hit the brakes on interest rate hikes.

Dr. Chinyere Almona, Director-General of LCCI, emphasized the need for immediate action to alleviate supply-side pressures that are fueling inflation.

Addressing the recent inflation report, which revealed a staggering 25.80% inflation rate for August 2023, Dr. Almona cautioned that the rising inflation was primarily driven by increases in both food and core components of the Consumer Price Index (CPI). She stated, “The path of price movements remains unclear in the near term,” underlining the urgency of the situation.

Furthermore, LCCI’s statement anticipates that businesses will resort to various cost-cutting strategies, including staff downsizing and increased reliance on local sourcing of raw materials, to mitigate the impact of inflation on their operations.

READ ALSO: Swedfund  Explores Partnership With AfDB

Dr. Almona’s statement was not limited to businesses alone; it also addressed the plight of households, predicting a continued decline in real income, especially in the short term.

READ ALSO  Expert Stresses Vital Role Of MSMEs In Nigeria's Economic Recovery

She emphasized the importance of prudent fiscal policies and immediate measures to combat food inflation, such as reducing and eliminating taxes on basic food items to protect the most vulnerable.

In addition to these calls for action, the LCCI has urged the Nigerian government to provide palliatives to cushion the effects of rising inflation on consumers. This multi-pronged approach aims to stabilize the economy in the face of growing inflationary pressures.

In August 2023, inflation surged to 25.80%, marking a 1.72% increase from the previous month’s 24.08%. Food and non-alcoholic beverages played a significant role in driving this inflation, contributing 13.36%, followed by housing, water, electricity, gas, and other fuels at 4.32%, and clothing and footwear at 1.97%.

Urban inflation rose to 27.69% year-on-year, reflecting a 6.73% increase compared to August 2022, while rural inflation stood at 24.10%, showing a 3.98% rise from the previous year.

This latest plea from the LCCI follows the Central Bank of Nigeria’s decision just two months ago to raise the benchmark interest rate to 18.75%, the highest it has been in 22 years.

READ ALSO  UCL:Rampant Bayern Munich, Arsenal Hit Man United, PSV For Four; Real Madrid Pips Union Berlin

The ball is now in the CBN’s court as it weighs the need for continued interest rate hikes against the pressing concerns of businesses and households grappling with the relentless tide of inflation.

Support Investigative Journalism and Mentorship

Courageous Journalism of Truth,Transparency and Development is in the DNA of Prime Business Africa; By donating as little as N1000 or $1 today, you are helping to keep credible journalism and life-changing information free for all.

Credibility and transparency is our DNA at Prime Business Africa’. We strongly believe in the role of media as a watchdog of the society that powerfully promotes accountability and transparency in government.

By contributing to Prime Business Africa, you are helping to sustain good journalism and making sure that it remains free to all.

READ ALSO  NCC Emphasizes Transformative Role Of AI In Africa
+ posts

Leave a Reply

Your email address will not be published.