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By Merit Ibe
The Lagos Chamber of Commerce and Industry ( LCCI) has predicted that the contribution of manufacturing to gross domestic product (GDP) may fall from the 8.2 percent recorded in the third quarter of 2022, except government takes targeted financing support to critical productive infrastructure in the country.
Director General, Chinyere Almona made this forecast in the Chamber’s statement on the economy 2023, where she explained that the manufacturing sector suffered from headwinds like scarcity of forex for import of inputs, weakened consumer demand due to weak purchasing power, high energy cost, logistical challenges, policy uncertainties and harsh regulatory environment.
However, with these factors persisting into 2023, the chamber is of the view that the sector may likely record a growth away from the negative growth of -1.9 per cent as at Q3 of 2022.
Explaining, she said with the lowering imports due to forex scarcity, local manufacturing could rev up in growth to meet the growing unmet local demand for hitherto imported finished products. This she said can come to reality if issues of rising inflation, high energy cost, high interest rates and logistics challenge due to insecurity in most parts of the country are addressed.
On the domestic economy, Almona noted that the base factors that may continue to drive the major economic indicators are the rising inflation rate, tight monetary policies, an unstable currency, foreign exchange scarcity, debt burden, currency management, food supply disruptions, exchange rate volatility and election spending.
Almona said that in 2023, government’s intervention through targeted financing support to the agriculture sector can boost production, create jobs and lower the spiking food inflation that has been responsible mainly for the rising headline inflation all through 2022.
On the African Continental Free Trade Agreement (AfCFTA) which provides huge oppourtunity to explore the African markets with Nigeria’s agricultural products, the chamber urged the Federal Government to scale up plans of establishing special economic zones where agro-processing activities are supported to produce finished food products for our markets and for export.
Almona further reiterated the need for the Federal Government to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, tackling insecurity and free more money from subsidy payments.
“With some of these challenges resolved, we expect to see a higher growth rate at above three per cent higher than the less than average two per cent recorded in 2022. We reiterate our call earlier made that government at all levels should invest more on prevention of climate change induced natural disasters like flooding.
“It is very imperative that we need sound monitoring and evaluation over the budget allocations to capital projects and defence spendings to respectively tackle infrastructural deficit and the fight against insurgency,” he said.
“We urge the government to tackle oil theft to earn more foreign exchange, borrow from cheaper sources to reduce the burden of debt servicing and pave way for the removal of the fuel subsidy by the incoming government.
“With increased spending by the government for census and general elections, the government must block revenue leakages, reduce costs and empower the private sector to create jobs and generate more revenue to the government.”
