Mr Timothy Olawale, Director General, Nigeria Employers Consultative Association, NECA
The Nigeria Employers’ Consultative Association (NECA), has appealed to the federal government to develop policy measures to address demand and supply shocks to stem the rising inflation rate as well as stimulating the economy ahead of a potential recession.
The NECA Director-General, Mr Timothy Olawale, made this known in a statement while reacting to the release of the March 2020 Consumer Price Index (CPI), by the National Bureau of Statistics, NBS.
The data released by the NBS revealed that the CPI, which measures inflation, increased by 12.26 per cent in March.
An analysis of the report released by the bureau on 2nd April 2021, showed that Lagos witnessed a decrease in the general price of food items in March on a month-on-month basis.
The CPI increased by 0.06 percentage points from the 12.20 per cent recorded in February.
Olawale said: “Following the release of the March 2020 CPI, the Inflation rate has increased by 0.06 per cent from the February 2020 figure to 12.26 per cent rising for the eighth consecutive month and the highest inflation rate the country has recorded in 23 months”.
The statement noted that, “With the lockdown and closure of businesses, it is believed that recession looms in the economy amidst the rapid spread of COVID-19 pandemic.”
The DG said that conventional policy measures currently being taken such as reducing interest rates and costs of borrowing, tax cuts and tax holidays were quite remarkable.
He however noted that these conventional policy measures were quite potent when there were demand shocks.
He stated that, “there are limitations to the successes that can be recorded when demand shocks are combined with supply shocks. It is already apparent from the emergence of the current crisis that there are implications on the economy from both the demand and supply sides”
He highlighted the clog to the demand end thus, “some of the demand factors include social distancing with consumers staying at home, limitations in spending and declining consumptions”.
Olawale also noted that “On the supply side, factories are shutting down or cutting down production and output, while in other instances, staff work from home to limit physical contact,” he said were all the factors for the demand and supply shocks which must be urgently addressed.
The Nigeria Employers’ Consultative Association, NECA, is the umbrella organization of employers in the organized private sector of Nigeria.