Mohammed Shosanya
The Chief Executive Officer of Centre For The Promotion of Private Enterprise,Dr. Muda Yussuf, has emphasized the need for the Federal Government to prioritize power, logistics,foreign exchange and security issues in order to tame the rising inflation in the country.
He said:”It will be very difficult to tame inflation if we do not substantially fix power, logistics and forex and security issues.
“Regrettably, there are no quick fixes in these areas. But it is important to prioritize these issues and drive accelerated progress with the right strategies”.
His suggestion came on the heels of resurgence of high inflationary pressures after some few months of respite despite policy measures to tame inflation.
Headline inflation rose to 32.7% in September 2024 as against 32.15% in August 2024, an increase of 0.55%.
There was also a marginal increase of 0.30% in month-on-month inflation between August and September.
Food inflation maintained its uptrend rising to 37.77% from 37.52% after decelerating in few months ago.
He lamented that the situation had been further exacerbated by the surging petrol price.
He added:”The reality is that the dynamics driving inflation are yet to be effectively subdued. These factors include the depreciating exchange rate, surging fuel price, rising transportation costs, logistics and supply chain challenges, high energy cost, climate change including resultant incidents of flooding, insecurity in farming communities and structural bottlenecks to production.
“These are largely supply-side issues.There is also the factor of seasonality of agricultural outputs which activates seasonal price surge in some food crops. Elevated inflationary pressures escalate production costs, weakens profitability, and dampens investors’ confidence.
“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”
According to him,tackling inflation requires urgent government intervention to address the challenges inhibiting production, productivity and security in the economy.
He suggested that the real sector of the economy needs to be incentivized to reduce production costs.
He also advised the government to offer concessionary import duty on intermediate products for industrialists.
The effects of high energy cost and exchange rate on inflation is quite significant, he added.
