LCCI wants diversification fundamentals reflected on economy
The Lagos Chamber of Commerce and Industry (LCCI) wants economic diversification fundamentals reflected on the Nigerian economy as the country faces headwinds resulting from global drop in oil prices.
Oil price drop has hit Africa’s biggest economy hard as revenue and foreign exchange have seen over 60 percent drop in the last 18 months.
The LCCI says, given these current challenges facing the country, the government needs to create the enabling environment that will provide veritable room for economic diversification. The chamber sees healthy business environment as a key diversification fundamental that must not be toyed with.
“In order to facilitate the adjustment process, we urge the government to create an enabling environment that will enhance the capacity and productivity of private sector enterprises,” said Nike Akande, president, LCCI, at the 2016 first quarter press conference held in Lagos.
“The policy and institutional environment need to be enabling. There are numerous sectors of the economy whose potentials are largely untapped. We believe that this is the time to look very closely at these various sectors, in order to accelerate the economic diversification process,” Akande said.
Akande, a two-time minister of industry, said the business environment has been experiencing some challenges, which have impacted negatively on business performance, stating that there should be a significant improvement in operating environment for the real sector to thrive.
She said the prolonged scarcity of petrol in the past few weeks has taken a major toll on business, halting production at factories while raising production costs.
“There is urgent need for the government to liberalise the downstream petroleum sector for unfettered private sector participation and investment. This would improve efficiency, attract more investment, generate more jobs and reduce the pressure on the country’s foreign reserves,” the LCCI president stated.
According to her, the worsening power supply across the country over the last couple of months has affected the productive sector of the economy, which commits so much money to alternative energy sources. “The situation continues to pose challenges to business operators, despite the tariff increase. There are complaints across all sectors about high energy costs, especially high expenditure on diesel and petrol for large and small businesses respectively. Most businesses spend as much as 15-25 percent of their total operating costs on alternative power sources,” Akande further said.
In order to solve the power challenge once and for all, the LCCI boss called for a review of the current framework/model, with a view to finding a sustainable solution to the current challenges in the sector.
“There is an urgent need to explore alternative models of power provision, which focuses on diversification of energy sources and decentralisation of power supply channels. The high dependence on gas pipelines from the Niger delta is characterised by high vulnerability risks which the economy and the citizens can no longer bear,” she added.
She said the Organised Private Sector (OPS) would be willing to see the passage of Petroleum Industry Bill, Solid Mineral Industry Reform Bill, Railway/Rail Transport Reform Bill, Inland Waterways Bill, Port Reform Bill, Ports and Harbour Bill, National Transport Commission Bill, Competition and Consumer Protection Bill, Currier & Postal Sector Reform Bill, and Land Use Bill, adding that they would make huge positive impact across several sectors of the economy, if passed.
She commended the Lagos State government for promoting good governance and improving the ease of doing business in the state through prioritising the critical pillars of economic development.
“We specifically note and commend the investment on security equipment and logistics in support of security agencies in the state; unveiling of N25 billion employment Trust Fund for youths; Light up Lagos Project which has boosted the night economy and enhanced the beauty of the city, as well as the creation of the Office of Overseas Affairs and Investment under the direct supervision of the state governor,” she added.
ODINAKA ANUDU