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NACCIMA Tasks Govt on Stemming Escalating Inflation
•Says Nigerian economy has shifted to walking inflation
Dike Onwuamaeze
The National Association of Chambers of Commerce, Industry and Agriculture (NACCIMA) has tasked the government to initiate measures that would increase the supply of food items in order to stem the escalating inflation in the economy.
NACCIMA also we urged governments at all levels to use all available resources to fill the gap in wheat imports into the country.
It expressed these views yesterday in a statement titled “NACCIMA’s View on the Current Inflation Rate,” which showed that the country’s inflation rate increased to 20.52 per cent in August 2022 from 19.64 per cent that was recorded in July as reported by National Bureau of Statistics (NBS).
It also pointed out that the newly recorded inflation rate was the highest figure recorded in the country since September 2005, adding that. “according to the year-over-year percentage change in inflation in the country, the Nigerian economy has shifted significantly into a walking inflation. That is, the country’s economy is too swift for individuals and businesses to sustain.”
It identified the persistent depreciation of the naira, high cost of raw materials, the invasion of Ukraine by Russia, the impact of heightening insecurity in the country on small holder farmers that could not go to farm and escalating price of crude oil as the major causes of inflation in Nigeria.
The NACCIMA, therefore, stated that, “the government must develop and implement policies targeted at increasing food supply and decreasing enterprises’ production costs while encouraging local production and ensuring that adequate infrastructures are put in place to meet the country’s needs and strengthen the food supply chain.
“This will also encourage the private sector and attract Foreign Direct Investment (FDI), thereby positively impact the Gross Domestic Product (GDP). Nigeria can increase its output if the nation’s production problems are addressed in the interest of inclusive economic growth and development.”
The NACCIMA, which is also a leading member of the organised private sector, urged, “governments at all levels to promptly utilise all available resources to fill the gap in wheat imports, as well as to make a longer-term commitment to minimise imports by providing both financial and technical supports for the wheat production value chain.
“For the development of wheat production in the country, it is essential to involve the appropriate agricultural industry stakeholders, including research institutes.
“Also, the country must address the insecurity that has impeded agricultural production. As we approach the wheat planting season (November and December), we expect the government to give local wheat production the deserved priority.”
It urged the government to set in motion actions that would revitalise the Nigerian electricity assets in order to reduce industries’ heavy reliance on diesel for production.
It said: “As the leading member of the organised private sector, NACCIMA recommends that government should review its current policies to help mitigate the present economic crisis, thereby putting an end to the struggle of most Nigerian businesses and the rising poverty rate among the population.
“The persistent insecurity in the nation has continued to impede agricultural activities and deter investments in agriculture in the nation’s food-producing regions, resulting in a decline in agricultural output.
“As a result of the war between Russia and Ukraine, the worldwide inflation rate has increased, which has led to an increase in the price of oil and food. This made it difficult for not only those with low incomes but for those with middle incomes to afford necessities.”
NACCIMA added in the statement that “Nigeria’s dependence on these countries for agricultural commodities such as grains and wheat for direct consumption and industrial commodity production has had a significant effect on food prices.”
It noted that “in 2021, Nigeria imports around 98.5 per cent of the required quantity of wheat, leaving Northern states with a production capacity of 1.5 per cent even though wheat matures in only 150 days and can be cultivated on all soil types except for severely damaged alkaline and waterlogged soils, the security situation in the country has impeded Nigeria’s potential to improve production.”
It is a well-established fact that Nigeria relies heavily on import of finished goods demanded by households and raw materials used by industry. Ironically, with the proper infrastructures, these items may be produced domestically.
