Business

April 16, 2024

Food Crisis: Address factors disrupting supply chain, NECA tells FG

Why workers can’t have living wage —NECA

*… says rising inflation requires a holistic approach

By Victor AhiumaYoung

The Nigeria Employers’ Consultative Association, NECA, has asked the government at all levels to address factors disrupting food supply, among others to resolve the worsening food crisis confronting the country.

NECA, the voice of business in Nigeria and the umbrella body for employers in the country pleaded with the nation’s policymakers to adopt a holistic approach to address inflationary pressures and promote economic stability.

In a statement titled “Nigeria’s inflation dynamics amid currency appreciation: Need for more supplementary measures”, NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, noted that while the tightening measures of the Central Bank of Nigeria have led to the recent appreciation of the Naira, there is, noticeable a decelerating increase in the recent inflation figure.

He lamented that despite currency appreciation typically dampening inflation by reducing import costs, other factors are exerting stronger upward pressure on prices.

According to him: “The latest publication of the Consumer Price Index by the National Bureau of Statistics, NBS, for March 2024 reveals a significant increase in the inflation rate.

“In March 2024, the inflation rate surged to 33.01 percent, marking a notable uptick from 31.7 percent recorded in February. This indicates a 1.31 percentage point increase over the period, reflecting the growing inflationary pressures in the economy.

“Moreover, compared to March 2023, the inflation rate rose by 10.97 percentage points, further underscoring the magnitude of the inflationary challenge.

Food inflation

“Of particular concern is the spike in food inflation, which climbed to 40.01 percent in March 2024 from 37.72 percent in February. Food inflation accounted for 17.2 percent of the total inflation rate for the month, highlighting the significant impact of rising food prices on overall inflationary trends.

“Additionally, the share of Housing, Water, Electricity, Gas, and other fuels contributed 5.56 percent to the total inflation rate, further adding to inflationary pressures across essential sectors.”

Mr Oyerinde, noted that “while the tightening measures of the Central Bank of Nigeria have led to the recent appreciation of the Naira, there is, noticeable a decelerating increase in the recent inflation figure.

“We believe that with time and the introduction of supplementary measures from the fiscal authority, addressing supply chain fundamentals the inflation figure would begin to decline.

“Despite currency appreciation typically dampening inflation by reducing import costs, other factors are exerting stronger upward pressure on prices.

“Supply chain disruptions, logistical challenges, and rising production costs continue to drive up prices across various sectors, amplifying inflationary expectations.”

However, there is hope that once the Dangote refinery commences production and distribution of petroleum products, transportation costs, and other production expenses will be significantly reduced.

“We advise policymakers to adopt a holistic approach to address inflationary pressures and promote economic stability. This includes implementing prudent monetary and fiscal policies to address supply-side constraints, enhance productivity, and stimulate investment in critical sectors such as agriculture and infrastructure.

“Additionally, fostering a conducive business environment, encouraging innovation, and promoting competition can help mitigate inflationary pressures in the long term.”

NECA’s Director-General emphasized “the importance of monitoring inflation dynamics closely, assessing the impact of currency movements, and advocating for evidence-based policies to promote economic resilience and inclusive growth.

“We urge government intervention at all levels to address factors disrupting food supply, support domestic firms to boost local production, and synergize monetary and fiscal policies effectively to combat inflation.”

Vanguard News