Even with a slight decline in the April inflation numbers, the Lagos Chamber of Commerce and Industry has said that it is still unacceptably high.
The inflation rate for April declined by 50 basis points, from 18.17 per cent to 18.12 per cent.
Inflation is enemy number one of an economy because it erodes purchasing power and triggers unemployment.
The LCCI, through its Director-General, Muda Yusuf, said on Tuesday, May 18, 2021 that the April inflation rates of 18.12 per cent was high, despite the 0.5 per cent decline from the March 18.17 per cent figure.
The April inflation also shows that Food inflation dropped to 22.72 per cent from the 22.95 per cent reported in March.
Yusuf said several structural constraints, including insecurity, had undermined the impact of monetary interventions on agricultural output.
“The Lagos Chamber of Commerce and Industry notes the marginal moderation (year-on-year) in headline inflation as domestic prices accelerated by 18.12 per cent in April 2021 compared to 18.17 per cent reported in the previous month.
“This is the first time the economy would witness a moderation in consumer prices since August 2019 when the Federal Government shut the land borders.
“The chamber notes the slight moderation in food prices on a year-on-year basis in April 2021 (22.72%) compared to 22.95 per cent reported in March 2021.
“However, food inflation at over 22 per cent is still very high in spite of the marginal moderation in food prices in April 2021.
“The situation has continued to impact the activities of every economic agent, including households, businesses and investors with profound impact on the citizenry, particularly the low and middle-income households.
“The high level of inflation continues to dampen consumer purchasing power at a time households income are not increasing in proportion to cost.
“High inflation environment also impact businesses in terms of rising production costs and depressed margins, making it increasingly difficult for corporates to deliver impressive returns to shareholders. This has implications for the sustainability of investments.
“Tightening policy stance by raising the monetary policy rate would naturally have implications for interest rates across key segments of the financial market. Overall, we believe effective synchronisation of fiscal and monetary policies is crucial in the fight against high inflation,” he said.