By Merit Ibe
The Lagos Chamber of Commerce and Industry (LCCI) is advocating a systematic review and evaluation of Federal Government policies to achieve the best-desired outcomes in the coming years, lamenting that the economy was still on adjustment mode one year after..
The chamber made the call following President Bola Tinubu’s one year in office, noting that while policy choices have been liberal on the sides of the monetary and fiscal authorities, expected outcomes have not been recorded yet..
In the chambers executive summary on the scorecard for the Tinubu administration after one year, Director General of the chamber, Dr Chinyere Almona viewed that the
economy has been in an adjustment mode with several variables like stubborn inflation, persistent weakening of the Naira, supply chain disruption driven by insecurity and weak production base, defining the outlook.
Noting that some bold decisions were taken at some point like removing fuel subsidies, harmonizing official and parallel exchange rates and adopting a cost-reflective electricity tariff, among others with sincere intentions of fixing structural deficiencies, Almona however pointed out that there was need for a systematic review and evaluation of these policies to achieve the best-desired outcomes.
Making a comparison between the GDP recorded in the first quarter of 2024 (2.98 per cent) and 2.31 per cent in the corresponding period of 2023, the DG said to meet the target of 3.37 per cent., the government must address issues around power supply, rising cost of production, Forex illiquidity and its impact on imported raw materials for manufacturers, making better choices of monetary instruments and dealing with the security challenges that have impeded agricultural production and supply chain disruptions.
She emphasised on the rising inflation which has not been successful, as the prices of goods keep an upward trend, with the inflation rate rising from 22.22 per cent in April 2023 to 33.69 per cent in April 2024, recording more than a 10 per cent leap in twelve months.
To this end, she said the chamber would continue to advocate concessionary interventions for SMEs in Nigeria in the face of shrinking credit to the private sector.
She pointed out that the Manufacturing sector in Nigeria has shown resilience and growth amidst recent reforms and government’s interventions aimed at fostering economic development and industrialization.
“As outlined in the data provided, the sector has experienced fluctuations in growth rates throughout the quarters of 2023 and the first quarter of 2024, reflecting both challenges and opportunities.”
The DG urged the government to fix the FOREX crises, adopt a lower exchange rate for import duties on imported raw materials for manufacturing, offer manufacturers concessionary interest rates in the face of shrinking credit to the private sector, and ensure the policy environment is stable and predictable.
To address low agricultural output, the chamber recommended that the government address the country’s high level of insecurity and the exchange rate crisis. In addition, the government must incentivize agricultural processing and invest in vital infrastructure such as power and transportation.
On Information and Communication Technology (ICT) Sector, she noted that the growth of the ICT sector since the second quarter of 2023 has been on a downward trend, reflecting several challenges facing the sector, such as exposures to exchange rate depreciation, poor electricity and high cost of fuel, high interest rates, and government policies..
She lamented that in the last year, several promising tech start-ups in Nigeria with the potential to contribute to the economy’s productivity immensely stopped operation because of the government’s inconsistent approach to policies related to the sector’s support. Some of these policies include the CBN policy on crypto firms and the country’s fintech.
Almona posited that the Tinubu administration could build on its initial successes and foster a more robust and inclusive economic growth trajectory for Nigeria in the coming years if the administration can implement the chambers recommendations which include: Strengthening fiscal and monetary policies to better control inflation; Continuation of tax reforms and improvement to compliance to increase government revenue; Diversification of the Economy; Investment in non-oil sectors to reduce dependence on oil revenues and build economic resilience; Improvement in Infrastructure; Acceleration of infrastructure projects to support economic activities and reduce logistics costs; Focus on Job Creation and implementation of targeted programs to reduce youth unemployment by supporting SMEs.