Rising cost of living crippling businesses, households – NECA

The Director-General of the Nigeria Employers’ Consultative Association Mr. Adewale-Smatt Oyerinde has expressed concerns over the rising cost of living in the country.

According to him, this situation is already having a negative impact on Nigeria’s poverty and production index.

Speaking in Lagos, Mr. Oyerinde said “in the last one year we have witnessed perpetual rising inflation, commodity price instability, reduced industry capacity utilization and a gradual dwindling of the purchasing power of Nigerians, all of which have further dragged many enterprises out of existence and Nigerians below the poverty lines”.

The NECA boss noted that “while the current administration has lined out policy plans to improve the living standards of the masses, such plans must be backed by deliberate and quick responses. As it is obvious to all, there is rising agitation owing to the rising cost of living, compounded by the increasing cost of PMS and threat of increment in electricity tariff amongst others.”

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While commending the removal of fuel subsidy, renewed efforts at curbing oil theft and the ongoing attempt to reform the Tax administration system with the appointment of Mr. Taiwo Oyedele as Chairman of the Tax Reform Committee, he said it is, however, important that government take more drastic steps to stop the slide into hopelessness by Nigerians and in deed organized businesses.

“It is instructive to note that businesses and households are currently being over-stretched beyond their shock buffers. Already, there is a drag on business operation as production plans are persistently displaced by frequently changing factor costs, and households are constantly adjusting consumption to accommodate their inadequate real income.”

Proffering immediate short-term considerations, Mr. Oyerinde said “at this breaking point, it is imperative for Government to quickly take deliberate actions to mitigate the persistent rise in inflation so as to address the fast-accelerating cost of living in the country. Such actions may include price stability mechanisms, periodic feedback on the progress of the ongoing work at the refineries, reversal of the VAT on AGO, and suspension of the planned upward review of electricity tariff. More importantly, government must conclude all palliative measures, which we expect should provide some immediate respite to both individual and corporate citizens.”

Meanwhile the Director/CEO of Centre for the promotion of private enterprise, CPPE, Dr Muda Yusuf, has called on monetary authorities to come up with a sustainable intervention framework to ensure the moderation of current volatility in the foreign exchange market.

While noting that the forex market is evidently under pressure as a result of a number of factors, he opined that the system needs to be managed in a way that would not undermine investors’ confidence.

“The volatility in the foreign exchange market is naturally unsettling.  But it is not unexpected given the long period of distortions in the foreign exchange market.  Correcting the entrenched distortions would take some time.

Noting that the policies introduced by President Bola Tinubu are on the right track, he called on the CBN to exercise better oversight on forex demands to ensure protection of the market from speculative assault and illicit capital outflows.