The Lagos Chamber of Commerce and Industry (LCCI), has offered a way out of food inflation and other economic challenges facing the nation. As observed by the chamber, the latest decision by the Monetary Policy Committee of the Central Bank of Nigeria (CBN) to maintain the Monetary Policy Rate (MPR) at 27.50%, is well appreciated and taken as the beginning of a better deal for the business community regarding the cost of credit.
The Director-General of LCCI, Dr. Chinyere Almona, said in recent months, the rising and high interest rates have tormented businesses seeking to leverage credit for business operations and expansion while looking forward to seeing a persistent focus on fighting the fundamentals that have contributed to rising inflation that had occasioned the hiking of rates as a form of response.
The group informed that the re-calibration of the Consumer Price Index (CPI) methodology by the National Bureau of Statistics (NBS) had resulted in notable statistical decline in inflation, dropping from 34.80% in December 2024 to 24.48% in January 2025, saying the reality remains that many businesses and households continue to grapple with high costs of goods and services.
The re-basing provides a more updated and reflective measure of economic conditions, but does not necessarily translate into immediate relief from inflationary pressures in practical terms, hence, keeping the Monetary Policy Rate (MPR) unchanged provides some form of policy stability, which enhances investor confidence and aids economic planning, at least in the short term.
This decision also aligns with a gradual approach to managing inflation, helping to contain price increases without introducing abrupt shocks to borrowing costs, especially in an environment where access to credit is already limited, and that there are notable challenges associated with this decision, it added.
Dr. Almona revealed that high interest rates sustain elevated borrowing costs, making it difficult for small and medium-sized enterprises (SMEs) to access affordable credit, which can hinder economic expansion and job creation.
Moreover, while the re-based inflation rate appears statistically lower, it does not translate to a tangible reduction in the cost of living, as many Nigerians still struggle with high prices for essential goods and services. LCCI, however, recommends that the government must not get comfortable with a re-based inflation figure and lose the fight against inflationary pressures.
The fundamental variables that have driven inflation upwards for months, like insecurity, high cost of energy, burdening cost of logistics and imports, and a volatile foreign exchange market, must be kept under close watch for targeted interventions.
The Director-General disclosed that the decision to hold the MPR steady underscores the need for complementary fiscal and structural reforms to support monetary policy efforts, urging the government to prioritise measures that enhance local production, improve supply chains, and boost economic resilience.
Policies that address energy costs, infrastructure development, and trade facilitation would be critical in ensuring that businesses can thrive while dealing with prevailing macroeconomic challenges. Furthermore, while inflation re-basing is a technical necessity for better statistical accuracy, the real test lies in how economic fundamentals improve over time.
The chamber stated that the private sector looks forward to continued engagement with policymakers to ensure that both monetary and fiscal interventions are aligned toward sustainable economic growth and improved living conditions for Nigerians, and urged the CBN and relevant authorities to ensure that monetary policy decisions remain responsive to the realities of businesses and consumers.
“While statistical adjustments provide a clearer picture of economic performance, concrete measures must be taken to reduce inflationary pressures in real terms, support enterprise development, and drive inclusive economic growth. We remain committed to engaging stakeholders to advocate for policies that foster a more robust and resilient Nigerian economy”, the chamber said.
Reacting to the January inflation figure, the LCCI has offered explanations to key questions such as what to make of the approximately 34.82% difference from December’s CPI following the re-basing? The chamber has explained that the sharp drop in the inflation rate from 34.8% to 24.48% is primarily due to the re-basing of the CPI rather than a real reduction in price levels for re-basing typically updates the weight of different goods and services in the inflation basket to better reflect current consumption patterns.
The drop in inflation from 34.8% to 24.48% is due to a change in measurement rather than a real decline in prices. The previous method likely over-emphasised food inflation, while the new approach incorporates updated economic data and adjusted weightings. This difference does not indicate a sharp fall in prices, but a revised way of calculating inflation. Despite the lower reported rate, inflation remains high, meaning prices are still rising, just at a slower pace.
Another question is, does a decreased inflation rate change anything about the living standards of Nigerians? A lower inflation rate may seem positive, but it does not automatically improve living standards. Prices are still rising, wages remain stagnant, and unemployment is high, keeping real incomes under pressure.
The re-based inflation rate only reflects a different measurement, not an actual drop in prices. For most Nigerians, essential costs like food and transportation remain high, meaning living conditions would not improve unless there is a real reduction in the cost of necessities. Another question borders on how should the government adjust its economic policies based on this new inflation report.
The chamber has clarified that while the re-based inflation rate provides policymakers with a clearer view of economic trends, it does not resolve the rising cost of living, saying the government must implement targeted interventions to address inflationary pressures and improve economic stability.
It added that one key priority is tackling food inflation, which accounts for over 50% of price increases while policies should focus on boosting agricultural productivity, reducing post-harvest losses, and improving transportation and storage infrastructure to ensure food affordability.
Therefore, stabilising the exchange rate is crucial, as naira devaluation had been a major driver of inflation for encouraging local production and reducing reliance on imports can help strengthen the currency and control price surges. Furthermore, LCCI agreed that fiscal discipline is essential, as excessive government borrowing and deficit spending contribute to inflation. Thus, reducing unnecessary expenditures while prioritising infrastructure and social investments can help manage inflationary pressures.
At the same time, the CBN must carefully adjust monetary policies, ensuring interest rate decisions strike a balance between controlling inflation and sustaining economic growth. Meanwhile, the LCCI, as part of its international relations activities, is collaborating with the Chinese Consulate-General in Lagos and China Foreign Trade Centre, in organising a ‘Promotion Seminar’ on the 137th Canton Fair.
The fair is to foster trade relations between both nations. During the meeting, participants from the two countries would share ideas and deliberate on how businesses can benefit from the fair, as the physical event would hold at the LCCI office in Lagos while live-streaming takes place simultaneously on the chamber’s social media channels in China and Nigeria.
