The Lagos Chamber of Commerce and Industry has advised the Central Bank of Nigeria to focus on the primary factors causing high inflation in its monetary policy decisions.

In a statement signed by its Director-General, the LCCI said the decision by the apex bank to raise the benchmark lending rate by 400 basis points to 22.75 per cent is an aggressive regulatory intervention.

It said the move comes at a crucial time for the Nigerian economy, facing challenges such as elevated inflation, commodity price hikes, the forex crisis, and rising cost of production.

It pointed out that while the CBN intended to control inflation, the decision, particularly the fifth consecutive hike, raised concerns about its effectiveness in tackling the accelerating food inflation and the likely impact on businesses and economic growth.

“The chamber’s view on the current fight against inflation is that the monetary and fiscal authorities should focus on the factors driving inflation rates by tackling the supply-side deficiencies instead of focusing too much attention on the demand-side management.

“We urge the CBN to continue with its forex market reforms to a conclusive end, as the high exchange rate against the naira is a major culprit in the skyrocketing inflation rates,” the statement read in part,” it stated.

On the fiscal side, the chamber urged the government to subsidise some productive sectors like agriculture, transport, and healthcare while keeping a stern eye on enhancing the country’s security profile.

Other areas of intervention outlined by the LCCI were the adoption of a cheaper duty rate for the importation of agricultural inputs for local manufacturing and investment in building agro-industrial hubs across the country.

The statement read further, “The LCCI urges the government to continue making credit available to MSMEs to support their operations and production lines. Concessionary rates, lower than CBN prevailing MPR, are hereby advocated for the MSMEs.

“The high lending rates make it challenging for businesses to access credit, especially for SMEs that are the backbone of the economy. The increase in production costs could lead to higher prices for goods and services, potentially affecting the competitiveness of Nigerian products in Africa and global markets, respectively.”

On Tuesday, the Monetary Policy Committee of the apex bank increased the benchmark interest rate by four per cent to a record 22.75 per cent.

The CBN Governor, Olayemi Cardoso, disclosed this while reading the communiqué of the first MPC meeting of the year on Tuesday in Abuja.

Members of the private sector and economists have faulted the MPC decision, saying it would lead to fresh job losses and possibly lead to a recession.