Businesses may have to cut labour force in addition to sourcing inputs locally, among other strategies, to lower the cost of operation amid inflationary pressures, in order to stay afloat, according to the LCCI.
Chinyere Almona, the director-general of the Lagos Chamber of Commerce and Industry (LCCI), said this in a statement on Monday, in reaction to the August inflation rate of 25.80 percent.
The inflation rate, according to the National Bureau of Statistics (NBS), rose from 24.08 per cent in August, translating to a 1.72 percent increase.
According to Almona, households’ real income would continue to experience a decline, especially in the near term. She added that the LCCI was concerned about the uptick in inflation (year-on-year) driven by an increase in both the food and core components of the CPI.
The slow pace of headline inflation month-on-month, according to Almona, may be an indication that the path of price movements remains unclear in the near term.
The LCCI recommended the need for the government to implement prudent fiscal policy measures.
“This is particularly in terms of borrowings as well as addressing the challenge of food inflation by immediately reducing and 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.
“Furthermore, we urge the Central Bank of Nigeria (CBN) to pause interest rate hikes to relieve the pressures on the supply side, especially at this time,” Almona said.