The Lagos Chamber of Commerce and Industry has urged the federal government to intensify efforts toward tackling the nation’s security and foreign exchange challenges to stem the current inflationary pressures.

Muda Yusuf, Director General of LCCI, made the plea in a statement on Wednesday in Lagos following the reports of accelerated headline inflation for January 2021 at 16.47 percent.

Mr. Yusuf pointed out a need to stabilise the foreign exchange market to reduce liquidity concerns and associated uncertainties and disruptions in the economy.

The LCCI boss ascribed the food index inflation to festive-induced demand for food items, which he said elevated food prices in December 2020, moderated considerably in January 2021.

He also said that the naira exchange rate depreciation and the forex liquidity challenges were major drivers of core inflation pressures.

Mr. Yusuf said the major factors responsible for the uptick in headline inflation were supply-side issues, including heightened insecurity, particularly in the North, the major food-producing regions in Nigeria.

He explained, “The Lagos Chamber of Commerce and Industry notes with concern the continued uptrend in domestic consumer prices as headline inflation further accelerated to 16.47 percent in January 2021, the highest since May 2017.

“The uptick in domestic prices was largely driven by the persistent food inflationary pressures, with food inflation hitting a record 20.57 percent, the highest level since the 2009 CPI series began.

“Rising food prices would see most low, and middle-income households spend more on food commodities, with a little money to save or invest, thereby pushing more Nigerians below the poverty line.

According to him, key drivers of core inflation include the naira exchange rate and foreign exchange liquidity concerns, higher energy costs, and the uptrend in the fiscal financing deficit by the Central Bank of Nigeria.

Mr. Yusuf noted that the consistent rise in domestic prices had profound implications for entrepreneurs and the larger investing community.

“Government authorities at national and sub-national levels should address security concerns in the country, due to its scale of importance as far as food production is concerned in Nigeria,” he added.