THE Lagos Chamber of Commerce and Industry (LCCI) on Thursday raised alarm over the current high inflation rate which has led to increase in food prices.
It also expressed concern over the country’s current high debt profile, lamenting that the huge cash meant for debt servicing was not healthy for the economy.
Addressing reporters at its second quarter (Q2) press conference on the economy, its President, Mr Babatunde Ruwase, said the Chamber was concerned over the general increase in the cost of living and urged the government to put measures in place to address the situation.
Ruwase said: “Inflation rose to 11.40 per cent in the month of May, representing the highest rate since December 2018 and higher than the 9.9 per cent target in the 2019 budget.
“Consumer prices rose 1.11per cent on a month -on -month basis in May, up from April’s 0.94 per increase. This increase was reported by NBS (Nigeria Bureau of Statistics) to be largely caused by faster growth of food prices.”
LCCI therefore, urged the Federal Government to show more commitment by taking actions that will stabilise food prices through improved food production, improved post-harvest management and transportation to reduce the volatility in food prices..
Ruwase said: ” Unfortunately, the drop in the budgetary allocation to the agricultural sector from 2.23 per cent in 2018 to 1.56 per cent in 2019 does not reflect the desired government’s commitment to improving the country’s food situation.”
He added that the plan by the Federal Government to obtain additional $2.7billion foreign loan calls for concern because in the last three years, the nation’s debt profile rose from $10.32billion in June 2015 to $22.08billion as of June 30, last year.
With this additional loan, the LCCI chief said the country’s foreign debt would increase and invariably increase the overall debt profile of the country which stood at N24.38tr as at December 31, 2018.
Already, the Federal Government proposed to spend a total of N2.14trillion on debt servicing in the 2019 fiscal year which is 27per cent of revenue. “We are concerned with the increasing amount meant for debt servicing and is becoming worrisome as more funds that could be used for developmental projects are used to service debt,” he said.
The Chamber said there is an urgent need for the government to cut down its debt and seek other ways of raising funds, by rigorously promoting new investments to increase revenue.