- Yusuf said in tackling inflation, the government needs urgent intervention to address the challenges inhibiting production, productivity and security in the economy.
The Centre for the Promotion of Private Enterprises (CPPE) has said that curbing inflation requires addressing soaring exchange rates and fuel prices.
CPPE asserted that underlying factors driving inflation remain unchecked, leading to a resurgence in inflation rates.
Dr. Muda Yusuf, CPPE’s founder, expressed this sentiment in Lagos while reacting to September’s inflation figures.
According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate rose to 32.70% in September, up from 32.15% in August.
Yusuf attributed this increase to factors like depreciating exchange rates, surging fuel prices, rising transportation costs, logistics challenges, high energy costs, flooding, insecurity, and structural bottlenecks.
He noted that while these are mainly supply-side issues, seasonal fluctuations in agricultural outputs also contribute to price surges in certain food crops.
“Elevated inflationary pressures have increased production costs, weakened profitability, and eroded investor confidence,” he stated.
Yusuf stated, “It is troubling that we are witnessing a resurgence of high inflationary pressures after some few months of respite in spite of policy measures to tame inflation, especially on the monetary side.
“Purchasing power had continued to plunge over the past few months and the situation had been further exacerbated by the surging petrol price.”
He added, “Not many investors can transfer cost increases to their consumers. The implication is that manufacturers and other investors are taking a big hit resulting from erosion of profit margins as a result of consumer resistance and weak purchasing power.”
To combat inflation, Yusuf advocated for urgent government intervention addressing production, productivity, and security challenges.
He recommended incentivizing the real sector to reduce production costs and offering concessionary import duties on intermediate products.
Yusuf emphasized, “It will be very difficult to tame inflation if we do not substantially fix power, logistics, foreign exchange and security issues.
“Regrettably, there are no quick fixes in these areas but it is important to prioritise these issues and drive accelerated progress with the right strategies,” he said.
“Hopefully the proposed economic stabilisation measures embodied in a bill currently before the national assembly would substantially address these concerns from the fiscal side.”
Yusuf also urged state governments to address food insecurity and inflation by investing in rural roads, enhancing agricultural productivity, and facilitating market access.