Economy remains weak, fragile –LCCI

By Merit Ibe

The Lagos Chamber of Commerce and Industry (LCCI) has warned that the Nigerian economyremains weak and fragile despite showing  10th consecutive growth amid contracting monetary policies. 

President of the chamber, Dr Michael Olawale-Cole, made the remark during an address on the state of the economy for the second quarter of 2023.

Explaining the 2023 1Quarter GDP  report, he said it recorded  a 2.31per cent (year-on-year) in real terms in the first quarter of 2023, compared to 3.52 per cent recorded in the previous quarter and 3.11per cent in the corresponding period in 2022. 

On the assessment and outlook for the future, the LCCI boss explained that growth in the first quarter was primarily driven by the following solid minerals 37.71 per cent services 4.35per cent, construction 3.27per cent and manufacturing 2.83per cent.

“The growth recorded in the solid minerals sector was higher when compared to 22.04 per cent in the previous quarter, while the services sector was lower compared to 5.69 per cent in the fourth quarter of 2022. 

“Construction sector growth moderated from 3.80per cent in the previous quarter. 

Real growth in the manufacturing sector continued, though slowed from 2.83per cent recorded in the fourth quarter of 2022. 

The agriculture sector contracted by –0.90 per cent in the first quarter compared to 2.05per cent in the previous quarter. The decline was due to lower livestock production and the leftover impact of the severe floods in the third quarter of 2022.”

Olawale-Cole noted that growth in the manufacturing sector remained subdued due to high inflation, continuous rise in interest rate, forex scarcity, high energy cost (due to subsidy removal and electricity tariff), and weakening purchasing power which could weigh further on the growth prospects of the sector.

He said in  the short term, growth in manufacturing is expected to remain weak due to squeesed consumer spending, while the outlook in the medium term is projected to improve due to subsidy removal which may attract investment in oil refining and other opportunities in the sector.The chamber called on the government to focus on tackling the many salient economic issues and making the most of the opportunity given to it by Nigerians to serve. 

“As a private sector advocacy group with the mandate to promote the business community’s interests, LCCI shall continue to engage relevant government agencies, the media, and other interest groups, where and when necessary, on actionable recommendations for a thriving business community and economy.”