By Chris Uba
The Nigerian Employers’ Consultative Association (NECA) has expressed concern over the rising trend of inflation in the country in the past 10 months.
It stated this in a statement signed by its Director-General, Timothy Olawale yesterday.
NECA was reacting to the consumer price index report released by the National Bureau of Statistics (NBS) which showed that Nigeria’s inflation rate rose to 14.23 per cent (year-on-year) in October 2020 as against 13.71 per cent recorded in September 2020.
The group noted that, “the rise from 13.71 per cent in September, 2020 to 14.23 per cent in October, 2020 suggests that the policy options provided by the Central Bank of Nigeria (CBN) in taming the gory head of inflation need critical review.”
It also noted that the persistent increase in food prices, caused by border closures, restrictions in forex market and insecurity predominantly in the northern states has further heightened the situation.
It pointed out that the inflationary situation was further compounded by the recent #EndSARS protest, which limited movement of persons and goods/services across most cities and the rising cost of transportation.
In the document titled, “Managing the Quagmire of Inflationary Pressure and other Macroeconomic Challenges: NECA Advocates for Robust Strategies to Attract Investors,” Olawale argued that, “since the deregulation of petrol prices, the country has witnessed petrol increase by almost 30 per cent in the last four months, which suggests a continuous increase in transport cost,” regretting that “sadly, Nigerians are now been battered on two fronts: high transport cost and high inflation.”
To mitigate these challenges, NECA suggested that the federal government should roll-out more direct fiscal interventions to aid domestic production, as has been done in the agricultural sector.
These interventions, it stated, should be extended to the mining, manufacturing and other high job creating sectors.
“It is also important to support the transportation sector, most especially the public transport (massive transit buses), by reducing the duties/taxes on cost of vehicle import, which is currently about 70 per cent for fully-built vehicle units.
If import duty waiver/reduction is applied to the public transport sector, this will surely go a long way in reducing cost of public transportation, said Olawale, who also noted that “with the current exchange and import duty, the landing cost of a high capacity bus in Lagos is approximately N78million ($170,000) at least. This is aside fuel cost which accounts for 35 per cent of revenue and interest rate of 27 per cent pa.”
The NECA Director-General said ,”while we applaud the various intervention programmes of the Central Bank of Nigeria (CBN) during the COVID-19 pandemic, the apex bank should complement its efforts by synergizing its policies alongside the fiscal authorities in bringing needed growth and development into the economy.
“We urge, as a matter of urgency that concerted efforts should be made across-board to create an environment that will not only attract foreign direct investment, but that will also enable current investors to remain sustainable as a way out of the challenges of a mono-foreign exchange economy.