The Lagos State Chamber of Commerce and Industry has predicted that the interest rate hike by the Central Bank of Nigeria and rising energy costs will constrain the growth of the country’s economy in the third quarter of this year.
He argued that with the costs of diesel skyrocketing above N800/litre, Jet-A1 at N710/litre, and PMS selling above the government-regulated price of N165/litre, production costs would continue to rise, leading to a decline in manufacturing and increase in job losses. “Sustaining the pace of recovery in 2022 and navigating through the growing uncertainties in the global economy requires well-coordinated fiscal and monetary policies in promoting growth-enhancing and confidence-building policies that would encourage private and foreign capital inflows into the economy,” Olawale-Cole said.
Meanwhile, he charged the CBN to embark on monetary tightening to tame inflation, and ensure that targeted concessionary credit to the private sector is sustained for Medium, Small and Micro Enterprises . “The government should initiate moves towards having cost-reflective tariffs in the power sector as this will attract the needed investment to boost power supply and possibly end the frequent crashes of the national grid. We should also begin to initiate special-purpose interventions in boosting the deployment of renewable energy.”