Economy
By Ejenike Christabel
DESPITE the headline inflation rate of 28.92% recorded by the National Bureau of Statistics, NBS, for December 2023, which is the worst inflation figure for Nigeria in recent time, but the International Monetary Fund, IMF, has predicted a decline in inflation rate for Nigeria in 2024. According to the IMF, the inflation rate is projected at 23%.
However, some Nigerian experts have endorsed the projection of the IMF. For instance, Gabriel Idahosa, the President of the Lagos Chamber of Commerce and Industry, LCCI, said in December 2023 that Nigeria’s inflation rate would decelerate in 2024.
“Certain things were predictable when the President declared that fuel subsidy was gone. We knew that there would be a spike in the price of fuel and everything connected to fuel. But all the measures to reduce the cost of transportation have started,” he said.
Reacting to the rising inflation and its impact on businesses and prices of commodities in the country, some small business owners in Enugu have complained that their businesses have been impacted negatively.
For instance, Chinaza Nwolie, a hair stylist told Realnews that “The country is hard, to eat three square meals is now very difficult for me, even though we are still surviving.”
She said that because of the incessant increase in the price of goods, she was now focusing on styling people’s hair and stopped selling materials for styling hair.
“I have stopped selling attachments because of the high cost of stocking them and the rate at which prices change in the market.
“My main challenge is that I can’t increase my prices because customers don’t agree to pay the new prices and if I insist on it, the customers will be chased away. My customers have also reduced in number due to their new choices of hair styles which are cheaper such as cornrow and weaves,” she said.
She, however, called on the federal government to stabilize the economy and reduce the hardship Nigerians are facing daily.
Speaking on the effects of the economy on his business, Ezeugwu Chinecherem Kingsley, a POS operator, said: “I am managing with my business, I take whatever comes from it as the country has come to this.
According to him, he recently increased his charges to cope better. “I have added money to the charges I collect from my customers, but some customers still haggle with the fixed prices, and when you refuse, they would look for another alternatives.”
But Nwotu A.K.A Nwotu, a scrap collector says that things are going well for him and that this is the best period for him. “Help me and thank the President wherever he is and that he’ll live long, that it is because of him that the poor are surviving.”
Although Nwotu acknowledged that things are difficult but he insists that Igbos thrive during difficult times and it is not new to them
“It is now that this scrap business is good, thank the President for me because he is the one that made everything good for us,” he added.
However, both the inflation figures of the IMF and the NBS for Nigeria may soon be discarded as the new directive of the Central Bank of Nigeria, CBN, to raise the import duty rate to N1,423 to the dollar will certainly trigger inflation and push up prices of imported goods and services beyond their current prices.
Reacting to the development, the Chief Executive Officer of Centre for the Promotion of Private Enterprise, CPPE, Muda Yusuf, said: “The drastic upward review of the exchange rate for the computation of import duty from N952 to N1423 would have a devastating effect on businesses across all sectors.” According to him, this increase is like the last straw.
“It is double jeopardy for the investors across all sectors, especially those in the real sector. This action will further fuel inflation as production and operating costs get escalated. The vulnerable segments of the population
will be further impoverished as cost push inflation gets exacerbated,” Arise news quoted Yusuf as saying.
Yusuf noted that it is worrisome that the upward review is coming at a period when businesses are yet to recover from the shocks of the new round of currency devaluation resulting from the sudden unification of the exchange rate, which has driven the official exchange rate to about N1400.
He, however, appealed to the CBN to reverse the rate hike in the interest of the already impoverished segments of our society and the numerous businesses that are already on the verge of collapse.
Yusuf argued that the shocks, disruptions and dislocations that would follow the review would be of immense proportions for businesses to bear.
“It is even worse that the rates take immediate effect. This is a policy action that is difficult to justify, especially in the context of the multidimensional headwinds that businesses are grappling with. The CPPE recommends that going forward the determination of the exchange rate for import duty computation should be treated as a fiscal policy matter and located within the remit of the fiscal authorities which is the finance ministry. This is necessary for proper alignment with extant fiscal policies,” he said.
5th February, 2024.
C.E.
Tags: ARISE NEWS CBN CPPE Gabriel Idahosa IMF International Monetary Fund LCCI Muda Yusuf NBS Nigeria Bureau of Statistics
