The Lagos State Chamber of Commerce and Industry (LCCI) has predicted that the interest rate hike by the Central Bank of Nigeria (CBN) and rising energy costs will constrain the growth of the country’s economy in the third quarter (Q3) of this year..
According to Olawale-Cole, the Chamber had pointed out earlier that rate hikes alone would not curb the inflationary pressures facing the economy, stressing the need to pay attention to supply-side support to reduce rising production costs caused by the high cost of energy and raw materials..
He argued that with the costs of diesel skyrocketing above N800/litre, Jet-A1 at N710/litre, and PMS selling above the government-regulated price of N165/litre, production costs would continue to rise, leading to a decline in manufacturing and increase in job losses..
Also, the LCCI President noted that the worsening security situation in many parts of the country, if not tackled, would continue to threaten agricultural production, manufacturing value chains and logistics.
Furthermore, he noted that the Chamber expects Nigeria to witness some fiscal challenges, occasioned by the country’s huge debt burden, accompanied by high debt servicing and heavy subsidy costs, warning of heightened fears of contracting output, constrained production, and recession risks.
On food security, the LCCI boss said for Nigeria to be self-sufficient in food production, the country must boost its agricultural output sustainably and discourage dependence on imports, warning of a looming food scarcity, which would worsen the plight of the poor if nothing is done quickly.
On his part, the Deputy President, LCCI, Gabriel Idahosa, noted that the food inflation in the past months, confirms that food prices have a high impact on the headline inflation, stating that the high cost of production occasioned by the rising fuel prices, forex scarcity, and supply chain disruptions may remain in the short term if nothing is done.