- Rising Costs Threaten Manufacturing and Consumer Purchasing Power
- OPS Urges Policy Overhaul to Address Inflationary Pressures
The Organised Private Sector (OPS) has raised alarm over Nigeria’s spiraling inflation, warning that the rising cost of production, raw materials, and logistics could stifle the economy. Concerns were amplified after the National Bureau of Statistics (NBS) reported a marginal increase in the December inflation rate to 34.80%, up from 34.60% in November.
According to the NBS, the festive season’s heightened demand for goods and services pushed inflation higher. On a year-on-year basis, inflation jumped by 5.87 percentage points from the 28.92% recorded in December 2023, further straining household purchasing power and business sustainability.
The food and non-alcoholic beverage sector contributed the highest inflationary pressure at 18.02%, followed by housing, water, electricity, and gas at 5.82%. Urban inflation soared to 37.29%, while rural inflation stood at 32.47%, both reflecting substantial increases compared to 2023.
Segun Kuti-George, National Vice President of the Nigerian Association of Small-Scale Industrialists, highlighted the risks of rising costs on local manufacturers. “If imported goods are cheaper, consumers will shift to foreign products, leading to higher inventories for local producers and potential business closures,” he warned.
Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria, emphasized the broad impact on the economy. “Rising inflation erodes purchasing power, increases production costs, and makes exports less competitive. This contributes to reduced economic growth and heightened poverty,” he said.
Experts have criticized the Central Bank of Nigeria’s monetary policy rate hikes, noting their ineffectiveness in curbing inflation. Olusola Obadimu, Director-General of the Nigeria Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), stated that the inflation surge stems from cost-push factors like high energy prices and supply chain disruptions.
Dr. Muda Yusuf, Director of the Centre for Promotion of Private Enterprise, noted the marginal inflation increase but expressed optimism for 2025. He advocated for pausing further monetary tightening, improving fiscal discipline, and reducing public sector debt to stabilize the economy.
OPS leaders called for a policy shift to reduce production costs, enhance competitiveness, and control governance expenditures. “We must foster a business-friendly environment, invest in infrastructure, and reduce consumption of foreign goods to spur job creation and economic growth,” Obadimu concluded.
