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•Decries nation’s sub-optimal performance
By Merit Ibe
The Lagos Chamber of Commerce and Industry (LCCI) has again emphasised the need for the Federal Government to address fundamental constraints to manufacturing competitiveness in the country as it marks its 63rd independence anniversary.
While wishing the government and people of Nigeria a happy Independence celebration, the Chamber in its anniversary statement with the theme: Sustaining Reforms and Promoting Microeconomic Stability, released by its President, Michael Olawale-Cole, noted that a review of the past 63 years showed that the Nigerian economy has performed sub-optimally with huge implications on citizens’ welfare and rising uncertainty.
Olawale-Cole noted that even as the economy was still struggling with difficult conditions including high inflation, weak currency, declining reserves, falling household purchasing power, rising debt burden, high and rising unemployment, rising income gaps and poverty levels, government’s intervention has become more compelling now than ever before.
He however noted that despite these challenges, Nigerians have persevered in promoting democracy and becoming Africa’s pride since 1999.
He lamented that the business environment remains a concern to investors, especially in the real sector.
“Weak infrastructure, uncertain policy environment, and institutions have continued to adversely affect the efficiency, productivity and competitiveness of many enterprises. “These conditions pose a major risk to job creation, economic inclusion, and competitiveness, especially with the Africa Continental Free Trade Area (AfCFTA) agreement now in place.
Recognising the impacts of the Federal Government’s reforms on vulnerable workers and low-income earners, the Chamber opined that there is an urgent need to review the wage structure of Nigerian workers (@ $30 for 30 days, noting that the minimum wage is extremely poor).
The LCCI boss noted that the present administration has implemented far-reaching policy reforms, such as removal of fuel subsidy, exchange rate harmonisation, tax reforms etc., in an effort to change the country’s growth trajectory. “Sustaining market-friendly policies and promoting macroeconomic stability is one of the most important steps in achieving optimal growth and improving citizens welfare. “With high inflation rate, volatile exchange rate, low GDP growth, weak infrastructure, insecurity, etc., I call on the Federal Government to address the macroeconomic issues and the insecurity challenges facing the country.
“The economic growth trend, measured by the GDP performance, has generally been positive over the last two decades, except for recent challenges posed by debt crises, inflation risks, insecurity, post-effect of subsidy removal and FOREX illiquidity.”
Proffering way forward, the chamber said the federal government needed to address the fundamental constraints to manufacturing competitiveness, noting that , job losses in the sector have increased over the decades as productivity declined on the back of the difficult operating environment.
“Our nation is at a crossroads and in dire need of big decisions to drive the drastic transformation the economy requires to return to meaningful economic prosperity. “
The foreign exchange market remains volatile
“The CBN in its July 2023 MPC meeting increased the benchmark interest rate by 25 basis points to 18.75% from 18.5%. This consistent hawkish stance by the monetary authority is in response to the high inflationary pressure, consistent weakening in the value of the local tender, and developments in the global economy.
The foreign exchange market remains volatile. Naira exchange rate (N/$) averaged N761.41/US$ as at the end of September 2023 compared to N770.32/US$ in the previous month at the Investors’ & Exporters (I&E) windows while at the Bureau de Change (BDC) Naira averaged N961.76/US$ compared to N910.65/US$ in August 2023.
Nigeria’s economy grew by 2.51% (year-on-year) in real terms in the second quarter of 2023 according to the report released by the National Bureau of Statistics (NBS). Nigeria’s public debt stock increased to N87.38 trillion ($113.42 billion) in Q2 2023 from N49.85 trillion ($108.30 billion) in the previous quarter.
