The Nigerian Manufacturers Association revealed that Nigeria’s inflation challenges are related to the fallout of economic policy under President Bola Tinubu’s administration citing the removal of fuel subsidy and the unification of the exchange rate.
They urged that the Nigerian Government must commit to addressing the challenges of insecurity and should deploy fiscal reforms that prioritise productivity and intensify infrastructural development to stimulate economic activity in a bid to combat rising inflation.
This was disclosed by Mr Segun Ajayi-Kadir, the Director-General, of the Manufacturers Association of Nigeria (MAN), reacting to the recent inflation report which placed food inflation at 27% as Headline inflation accelerated to 24.08% in July as against 22.79% in June
The manufacturing boss noted that increasing energy costs and widespread insecurity in food-producing regions also exacerbated inflationary pressures, citing current inflationary condition in Nigeria was adversely affecting manufacturing operations, just like most other sectors of the economy.
Ajayi-Kadir listed some of its impacts including an increase in production cost, reduced profit margin, supply chain disruptions, uncertainty in planning, and reduced consumer spending, adding that working with stakeholders could help mitigate inflationary pressures and promote sustained economic growth.
- “Some of the ways that will ensure effective and conducive operations of manufacturers in the Nigerian economy include the CBN implementing effective exchange rate policies that prevent sharp depreciation of the currency.
- “There should be increased targeted support to the agricultural sector to enhance productivity, reduce reliance on imports and stabilise food prices.
- “Nigeria must continue to formulate policies that promote a stable and conducive business environment which can attract both local and foreign investments, leading to increased production, job creation, and ultimately, stability in prices.
He added that Government must commit to addressing the challenges of insecurity and should deploy fiscal reforms that prioritise productivity and intensify infrastructural development to stimulate economic activity, create jobs and improve living conditions.
NewsTimes reported earlier that Dr Muda Yusuf, Director of the CPPE reacting to the inflation report stated that the Nigerian Government must address the challenges bedevilling the supply side of the economy as this is imperative to urgently fix production and productivity constraints, stabilize the exchange rate by ensuring liquidity in the forex market, tackle insecurity, and accelerate efforts to ensure domestic refining of fuel.
He noted that some of the factors affecting inflation are global, others are domestic, adding:
- “These factors include the depreciating exchange rate, a spike in energy prices, rising transportation costs, logistics challenges, forex market illiquidity, hike in diesel cost, insecurity in many farming communities, and structural bottlenecks impeding productivity.”
- “These are largely supply-side and policy concerns. But the petrol price increase following the fuel subsidy removal and the sharp depreciation in the exchange rate were dominant factors.”