The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, has warned that the recent spate of herdsmen-farmers clashes in the middle belt and floods are negative signals capable of limiting food harvest this year.

Noting that the marginal decline in headline inflation as released by the National Bureau of Statistics (NBS) may have been driven by the consistent monetary tightening by the Central Bank of Nigeria (CBN), liquidity control mechanisms, she said the slight improvement must be viewed cautiously, considering prevailing structural risks and looming food production and distribution shocks.

The DG added that logistics and supply chain risks are potential risks considering the current escalations in the Middle East and stalled ceasefire talks between Russia and Ukraine.

She expressed concern that importing fuel and other products may become more expensive as oil prices have risen due to unabating tensions. These shocks, she said, pose significant risks to food availability and prices, which could drive food prices up.

Urging a coordinated mix of fiscal and monetary policy actions, she said the reforms in the oil and gas sector have slowed down fuel price increases recorded earlier in the year.

“The Naira-for-crude policy and the mandated crude supply to local refineries must be sustained. Also, the CBN should maintain prudent monetary policy while improving credit access to productive sectors, especially agriculture and manufacturing, to stimulate supply-side responses to inflation. The stoppage of government ways and means should be sustained no matter the pressure,” she said.

Almona called on the government to urgently scale up support for dry season farming, irrigation infrastructure and mechanisation to reduce Nigeria’s dependence on rainy season food production.

“The government must remain focused on dealing with the challenges around food movement from farms to the cities. Addressing inefficiencies in transporting goods, particularly food, from rural to urban markets can help lower market prices and reduce post-harvest losses.

“Furthermore, Government spending must prioritise critical sectors with high inflation pass-through, such as food, energy and transport, while eliminating leakages and enhancing social safety nets for vulnerable households,” she said.

Almona added that while the easing inflation rate is a welcome development, Nigeria must not slow down in addressing the structural drivers of inflation. She urged the government to act decisively in tackling insecurity, invest in resilient agricultural infrastructure and improve policy coordination to ensure the current progress is sustainable. (The Guardian)