The Lagos Chamber of Commerce and Industry (LCCI) has advised the Central Bank of Nigeria (CBN) to review its tight monetary policy as inflation rate has declined for the 15th consecutive time.
The LCCI Director-General, Muda Yusuf, made the plea on Tuesday in his reaction to the National Bureau of Statistics (NBS) April inflation rate which stood at 12.48 per cent from 13.34 per cent in March.
According to the NBS report, the decline is the lowest since February 2016.
Yusuf said that the continuous tightening of the monetary policy would not stimulate growth and create jobs in the business community because the policy had inhibited liquidity flow for investment.
According to him, Nigeria’s inflation cannot be strictly a monetary issue, adding that the Federal Government could drastically reduce inflation by tackling the issues that led to high inflation.
“Things like cost of transportation and energy cost are very important factors that impact on inflation.
“We should not focus too much on using monetary tools to tackle inflation because in the process of doing that we stifle the economy and deny it of the needed liquidity that would promote growth,” he said.
Yusuf said that high cost of funds had inhibited the growth of the real sector, adding that foreign investors could bring in cheap funds, while their domestic counterparts used expensive funds for production.
“It is a major challenge because many investors that ended up with AMCON are largely those who could not meet the high-interest rates,” he said.
Yusuf urged the government to harmonise its fiscal and monetary policies toward stimulating growth and competitiveness of the economy.