The Lagos Chamber of Commerce and Industry (LCCI) have said businesses could implement a variety of cost reduction strategies to lower their operating expenses.
The chamber is concerned about the uptick in inflation (year-on-year) driven by increase in both the food and core components of the Consumer Price Index, according to a statement on Saturday.
“However, the slow pace of headline inflation month-on-month may be an indication that the path of price movements remains unclear in the near term,” it said.
It said businesses will implement a variety of cost reduction strategies, including downsizing and local sourcing of input factors as they bid to lower operating expenses. “Also, household real income will continue to experience decline, especially in the near term.”
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LCCI recommended that the government should implement prudent fiscal policy measures, particularly in terms of borrowings as well as address the challenge of food inflation by immediately reducing or removing tax on basic food items to protect the most vulnerable.
“We implore the government to hasten the provision of the anticipated palliatives to lessen the impact of the rising trend in prices on economic agents. Further, we urge the CBN to pause interest rate hikes to relieve the pressures on the supply side, especially at this time,” the chamber said.
According to the National Bureau of Statistics, the country’s inflation rate rose to the highest in 18 years to 25.80 percent in August 2023 from 24.08 in the previous month.
Food and non-alcoholic beverages contributed the highest to the price increase at 13.36 percent followed by housing water, electricity, gas and other fuel (4.32 percent), clothing and footwear (1.97 percent), transport (1.68 percent) and furnishing & household equipment & maintenance (1.30 percent).
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