LCCI urges FG, states to accelerate diversification

The Lagos Chamber of Commerce and Industry (LCCI) has urged the federal government to encourage and accelerate the process of economic diversification in the country and reduce its reliance on a particular source of generating revenue in order to avoid crisis that can cripple economic development.

Speaking at the 130th annual general meeting of the LCCI held in Lagos on Thursday, Babatunde Paul Ruwase, president of LCCI , stated that data obtained from the National Bureau of Statistics showed that the economy grew by 1.5 percent in the second quarter of 2018, from the 1.95 percent gotten earlier in the first quarter.

He explained that the data released show how delicate the Nigerian economy is and how urgent it is for the government to accelerate economic diversification process, considering that the oil market, which is the major revenue generating source, has been experiencing constant decline in prices from $86 per barrel to $60 per barrel. Ruwase said rapid population growth rate of three percent can result into economic crisis if not well handled.

He stated that interest rate remains high as commercial banks’ lending rates stay between 20 and 35 percent.

Ruwase passed a message to the federal government using the 2019 World Bank ease of Doing Business report, which ranked Nigeria 146th position out of 190 countries assessed, signifying a decline from 145th position in 2018.

 “In 2018, businesses experienced frequent incidence of regulatory challenges, leading to increased burden on businesses, higher cost of operation, waste of executive time and reputational consequences. These manifested in form of arbitrary fines and charges, sanctions and frequent summons of corporate executives by the National Assembly. The regulatory environment was a major source of distraction for many corporates during the outgoing year. It also adversely impacted the confidence of investors.”

“We also had to contend with the usual constraints of the business environment. There was high interest rate, weak GDP growth, weak consumer demand, traffic gridlock on Lagos port roads and insecurity in some parts of the country, among others”.

“Our recent maritime port feedback research finds that approximately 40 percent of businesses located around the Lagos ports’ communities have relocated to other areas, scaled down operations or completely shut down. This development has very huge adverse implications for job creation, tax revenue and real economic activities,” he said.

He said Nigeria has managed to remain a robust economy while maintaining a positive growth, with a large market abundant natural resources and a productive population, stressing that there is still room for more improvement.

He advised that the government should establish an encouraging environment where entrepreneurs, small and medium enterprises can flourish with ease.

He said the chamber has been able to embark on various courtesy visits, including to the top three citizens of the country comprising of the president, the vice president and the senate president.


Faminu Gbemi

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