LCCI STATEMENT ON INFLATION DRIVERS 2025

INFLATION DRIVERS: FOREX STABILITY, SUPPLY CHAINS & INTEREST RATES

The Lagos Chamber of Commerce and Industry (LCCI) acknowledges the recent moderation in Nigeria’s Consumer Price Index (CPI), with inflation easing for the fifth consecutive month to 20.12% in August 2025. While this is a welcome development, the current inflation level remains uncomfortably high. It is therefore imperative that government and economic managers remain vigilant in addressing the key drivers of inflationary pressure.

More deliberate efforts are required to strengthen Nigeria’s food production ecosystem to meet the demands of our growing population, resolve persistent supply chain disruptions in the oil and gas sector, stabilize foreign exchange earnings from exports, and sustain ongoing economic reforms to secure durable outcomes.

Oil and Gas Sector Reform
Given the high energy costs facing households and businesses, there is an urgent need to reassess the oil and gas sector. Recurring challenges such as crude supply to local refineries, pricing disputes among marketers, and tensions with unions continue to create instability. The full and decisive implementation of the Petroleum Industry Act (PIA) is critical. Current gaps in compliance have resulted in labor abuses and uncertainties, as seen in the recent NUPENG–DAPPMAN–Dangote Refinery dispute.

Forex Stability and Export Competitiveness
While foreign exchange stability has been achieved in part through improved export earnings, greater transparency, robust reserves, and reduced imports, it remains fragile. Policy decisions must therefore be carefully weighed to avoid disrupting this progress. The recent export ban on Shea Nuts must be carefully implemented based on critical fundamentals. Protecting local production through an export ban can result in multiple challenges if the factors supporting local production are unavailable. The Chamber has consistently advocated for adding value to our primary commodities and exporting them as finished goods, rather than exporting them in their raw state. We must, however, reconsider the state of agro-processing infrastructure in Nigeria. The policy could also harm exporters with existing international contracts while limiting FX inflows. Government policies should focus on incentivizing domestic processing, upgrading agro-processing infrastructure, and promoting value-added exports.

Way Forward
Supporting domestic industries while safeguarding export markets is crucial to sustaining FX inflows, maintaining exchange rate stability, and continuing the ongoing disinflation trend. Managing the oil and gas sector effectively, alongside prudent trade policies, will be central to reducing inflationary pressures and positioning Nigeria on a path to sustainable growth.

Nigeria cannot afford to lose momentum now. Every policy decision must reinforce growth, stability, and the confidence of both consumers and investors. The LCCI reiterates its commitment to working with the government and stakeholders in ensuring policies that balance consumer welfare, investor confidence, and macroeconomic stability.

Dr. Chinyere Almona, FCA
Director General/Chief Executive Officer
Lagos Chamber of Commerce & Industry
Wednesday, 17 September 2025