By Benson Daniel
The Organised Private Sector (OPS) has cautioned that although Nigeria’s inflation rate has recorded a modest decline in recent months, the cost of doing business and the prices of essential goods remain unacceptably high, continuing to weigh heavily on businesses and households across the country.
Business leaders said the latest easing in headline inflation should not be interpreted as a sign that economic pressures have significantly reduced, noting that manufacturers, traders and service providers are still grappling with soaring production costs driven by high energy prices, transportation expenses, foreign exchange volatility and elevated borrowing costs.
According to the OPS, the current inflationary environment continues to erode consumer purchasing power, weaken business confidence and limit investment, particularly for small and medium-sized enterprises that form the backbone of Nigeria’s economy.
The group observed that while inflation figures may be moving in a positive direction, prices of food items, raw materials and industrial inputs remain far above levels recorded before the recent economic reforms. Many businesses have therefore been unable to reduce the prices of their products and services, as operating costs remain significantly elevated.
Industry operators explained that the cumulative impact of exchange rate adjustments, rising electricity tariffs, high logistics costs and increased fuel prices has continued to place enormous pressure on production and distribution, forcing many firms to operate below capacity or pass additional costs on to consumers.
The OPS urged the Federal Government and monetary authorities to complement efforts at stabilising inflation with policies that support productive sectors of the economy. These include improving access to affordable credit, enhancing electricity supply, strengthening local manufacturing, reducing port bottlenecks and investing in transport infrastructure to lower logistics costs.
The private sector also stressed the importance of maintaining exchange rate stability and creating a predictable business environment that encourages domestic and foreign investment. According to the group, sustained macroeconomic stability is essential for reducing inflation over the long term and restoring confidence among investors.
Economists noted that a decline in the inflation rate does not necessarily mean that prices are falling. Rather, it indicates that prices are rising at a slower pace than before. As a result, households may continue to experience financial strain until inflation moderates further and real incomes begin to improve.
They added that restoring price stability will require coordinated fiscal and monetary policies aimed at boosting domestic production, improving agricultural output, expanding manufacturing capacity and addressing structural challenges that continue to drive inflationary pressures.
The OPS maintained that while recent improvements in inflation data are encouraging, the government must sustain reforms that stimulate production, strengthen supply chains and improve the overall business climate. Such measures, it said, will be critical to reducing the cost of living, supporting business growth and placing the Nigerian economy on a more sustainable path.
Business stakeholders expressed optimism that with consistent policy implementation and continued economic reforms, inflationary pressures could gradually ease, creating a more favourable environment for investment, employment generation and long-term economic growth.
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