Key reforms can accelerate Nigeria’s economic recovery – LCCI
The Lagos Chamber of Commerce and Industry (LCCI) has called on the federal government saying that stronger commitment to key reforms can accelerate Nigeria’s economic recovery in 2021.
President, LCCI, Mrs Toki Mabogunje, stated this in Lagos at the Chamber’s first quarterly briefing in 2021, while previewing expectations for the year.
LCCI among many recommendations called for the unification of foreign exchange (forex) rates which would create an enabling environment and maximize opportunities from Nigeria’s participation in the African Continental Free Trade Area (AFCFTA) agreement, and the sustenance of low interest rates regime to expedite recovery and bolster investor confidence in the nation’s economy.
Mabogunje stated: “Accelerating the pace of economic recovery requires fiscal and monetary authorities to be well coordinated to promote growth-enhancing and confidence-building policies that would encourage more private capital inflows into the economy. Investment-led growth strategy is critical for inclusive and sustainable economic growth.
“Strong commitment to key reforms will not only boost output recovery but will also put the nation on a path of macroeconomic stability.
“Review of the foreign exchange management framework to expand the scope of market mechanism in the determination of the exchange rate.
“The unification of the exchange rates should be prioritised. This is imperative for expediting recovery and bolstering investor confidence.
On AfCFTA, she noted: “For Nigeria, the trade agreement serves as an avenue for local industries to penetrate new markets and establish strong cross-border supply chains with other African countries.
“We believe the benefits and costs of the agreement will not be evenly distributed among participating countries and only countries with open, friendly, and enabling operating environment stand to benefit materially from the agreement.
“This underscores the need for policymakers to expeditiously create an enabling environment that would enhance the country’s economic competitiveness in the AfCFTA framework.”
On interest rate regime, Mabogunje said: “LCCI lauds the low interest rate regime that prevailed for most part of 2020 and would like to see it sustained in 2021.
“The low yield environment has been beneficial to investors in terms of mobilizing cheap funds for investment in the real economy. The low yield environment also contributed significantly to the impressive performance of Nigerian Stock Market in the previous year.
“A low interest regime will encourage blue-chip corporate to undertake further investments, thereby stimulating aggregate demand and economic growth.”
LCCI counseled that policies to be sustained by the government in 2021 should include: Deregulation of the downstream oil industry and passage of Petroleum Industry Bill (PIB).
“We acknowledge government’s resolve towards deregulating the downstream segment of the oil industry. We also note the push back to the comprehensiveness of the reform. We would like these measures to be sustained in 2021.
“However, it must be noted that deregulation will not yield the desired benefits for industry players and Nigerians given the monopolistic structure of the Nigerian downstream oil industry characterized by huge dependence on the NNPC for product supply,” Mabogunje stated.
LCCI urged government at all levels to set the following as key priorities in 2021: Deepen Investor Confidence; Pursue an investment-led growth strategy; Tackle insecurity; Port reforms and Normalize forex market.
“In 2021, there is need for our policymakers to formulate and implement policies that facilitate business continuity, particularly this time business operators are confronted with disruptions associated with a new wave of the pandemic.
“Policies that harm businesses and scare investors should be discouraged. Our policies must foster economic competitiveness at national and subnational level, support businesses, protect jobs and preserve investments,” she added.
Suzan O/NAN
