LAGOS Chamber of Commerce
and Industry LCCI, says unless
factors driving inflation are
tackled to enhance economic
growth and reduce inflation
rate significantly, the welfare of
citizens will hardly improve.
The LCCI Director-General,
Mr Muda Yusuf, stated this
yesterday in Lagos that hike in
food prices, costs of production
and low investment were direct
consequences of government’s
failure to address inflation
It would be recalls that
National Bureau of Statistics
NBS, report, released on May
16, reveals that April inflation
rate dropped to 17.24 per cent
on year-on-year basis from 17.26
per cent in March.
“It is not a significant drop.
The fact that we have a drop in
inflation rate does not mean that
prices of goods will come down.
“Inflation rate is the rate
of increases in prices, so it is
the rate of increases that is
dropping, it is not that prices are
“It means that the issue of
high prices is still a problem in
the economy. It is a problem for
businesses and even a bigger
problem for the citizens.
“If there is anything that
impacts adversely on the poor, it
is inflation and particularly high
prices of food and services,” he
According to him, to see a
dramatic impact on citizen’s
welfare and price of foods,
inflation rate has to reduce
drastically below its present
“Over the last one year, prices
of foods and pharmaceutical
products have doubled, so
we still need to do a lot more
to bring down prices in the
economy,” he said.
The director-general said that
trade policies, foreign exchange
issues, tax regimes and energy
challenges which constituted
factors driving inflation should
be addressed to experience
significant reduction in inflation
“Foreign exchange rate has
been a factor and it is beginning
to come down a little. Energy
cost is a big factor driving
inflation but it is not coming
down yet.
“Trade policies have not
changed because the import
duties on some of the products
are still too high.
“Without prejudice to looking
inward or being self reliant as a
nation, we need to review some
of the import duties especially
in sectors where we do not have
strong local capacity.
“Where we do not have local
capacity, import duty should
not be high; otherwise, it would
be the citizens that would pay
dearly for these items,” he said.
Yusuf also said that tax
review should be done for
manufacturers to reduce cost of
production and encourage their
“In Ghana, Value Added Tax
VAT, was reviewed from 17 per
cent to 3 per cent and some other
taxes were also brought down to
make it easier for businesses to
produce cheaper goods.
“We can replicate the same in
our country so as to reduce the
burden of high cost of foods
on the masses and also bolster
industrial growth,” Yusuf
said. He said that the economy
would benefit from reduced
tax rates through improved tax
coverage and compliance rate
from businesses. NAN

READ ALSO  MX Oil updates on acquisition of business in Nigeria