The Lagos Chamber of Commerce and Industry (LCCI) has raised the alarm that Nigeria’s inflation rate, which has risen for 15 consecutive months so far, will continue its climb by 2021.
The LCCI Director-General, Muda Yusuf, disclosed this on Sunday, December 27, during the LCCI’s Economic and Business Review for 2020 and Outlook for 2021.
Yusuf explained that the forecasted inflation rate would be a result of rising food prices due to food value chain disruptions caused by insecurity, energy costs, lack of FX liquidity, and others.
According to him, “We, however, believe a broad-based harmonisation of fiscal and monetary policies towards addressing the identified structural constraints will significantly help to moderate inflationary pressure in the medium term.
“On the COVID-19 second wave, he said the pandemic would lead to disruptions in Nigeria’s oil and non-oil economy.
“We expect Information and Communication Technology, financial institutions, and agriculture to drive growth in the non-oil sector in the short-term; while the country’s commitment to Organisation of Petroleum Exporting Countries (OPEC) agreement is expected to dampen recovery prospects of the oil sector.”
The LCCI DG also spoke about agriculture, saying that some agric products might face the risk of competing with smuggled products.
According to him, “While the ban on importation of rice, poultry, and other agricultural commodities still subsists amid border reopening, there is risk of resurgence of smuggling of agricultural products into the country considering the porous nature of Nigeria’s land borders.
“This, combined with the commencement of the Africa Continental Free Trade Area (AfCFTA), could see Nigeria being a destination for imported food products in the absence of adequate border monitoring measures.
“Additionally, heightened security concerns around the country, especially in the northern part and resurgence in the herder-farmer conflict in the Middle Belt, the southwest and southeast, if unaddressed, will hamper local food production in the near term. Nonetheless, we expect a modest growth performance in the year 2021.”
LCCI 3Q 2020 estimates:
- Oil Sector – 13.89%
- Agriculture +1.39%
- Manufacturing -1.51%
- Trade -12.12%
- Financial & Insurance +3.21%
- Construction -2.84%
- Arts, Entertainment & Recreation -4.67%
- Real Estate -13.4%
- Transportation & Storage -3.45%