The Lagos Chamber of Commerce and Industry (LCCI) has stated that addressing challenges in the real sector is crucial to curbing inflation, as rate hikes alone are insufficient. LCCI President, Mr. Gabriel Idahosa, expressed this view during the chamber’s quarterly State of the Economy news conference in Lagos on Thursday.
Idahosa emphasized the real sector’s capacity to create jobs, manufacture goods for consumption and export, and serve as the foundation for the country’s industrial base. He pointed out that high interest rates, while attracting Foreign Portfolio Investments and encouraging local investment in treasury bills and bonds, were simultaneously draining funds away from the private sector, which is essential for economic growth and employment generation.
“Recent hikes in the Monetary Policy Rate have led to higher borrowing costs, making it more difficult for businesses to access credit for working capital and expansion,” Idahosa noted. He warned that inflation could continue to rise due to the ongoing crises in petroleum pricing, which have created unprecedented economic burdens.
To combat inflation, Idahosa urged the government to focus on boosting food production through policy reforms, fiscal interventions, and improved management of the exchange rate. He also recommended harmonizing fiscal and monetary policies to reduce agricultural production costs, enhance food processing, and address insecurity, which he believes would alleviate inflationary pressures.
Furthermore, Idahosa called on the government to intensify efforts in ongoing economic interventions, such as reducing taxes, promoting Compressed Natural Gas (CNG) mobility, implementing the Crude for Naira scheme, and suspending certain import duties. These steps, he suggested, could help stabilize the economy and foster private sector growth.