Despite that the economy witnessed an incremental deceleration in inflation over the last few months, it remains a major concern for businesses and families, the Centre for the Promotion of Private Enterprise (CPPE), said yesterday.
Its Chief Executive Officer (CEO), Dr Muda Yusuf, in a statement, quoted figures from the National Bureau of Statistics (NBS), which showed that headline inflation decelerated by 0.38 per cent in September from 17.01 per cent in August to 16.63 per cent. While food inflation, the biggest worry for the poor, decelerated by 0.73 per cent from 20.3 per cent in August to 19.57 per cent in September.
On the major drivers of inflation and cost to the economy, the former Lagos Chamber of Commerce & Industry (LCCI), Director-General, identified exchange rate depreciation has a significant impact on headline inflation, especially the core sub index.
He faulted the Central Bank of Nigeria (CBN) deficit financing, which, he said, triggers highly inflation because of its liquidity injection effects on the economy, especially when statutory thresholds are exceeded.
Yusuf also noted that insecurity and liquidity challenges in the foreign exchange market is impacting adversely on manufacturing output.
“Increasing cases of flooding and desertification in many parts of the country created a lot of negative impact on agricultural output. In addition to huge differential between farm gate prices and market prices resulting in high transportation costs affecting distribution costs across the country is a major issue with high transactions costs at the nation’s ports that increases production and operating costs of businesses, high energy cost and high import duty on intermediate goods and raw materials,” he said.