LCCI Seeks Reduction in Interest, Foreign Exchange Rates

For the country to sustain the present economic recovery and achieve the growth forecast for 2018, the Lagos Chamber of Commerce and Industry (LCCI) has advised the federal government to, as a matter of urgency, address the issue of multiplicity of exchange rates, invest aggressively in infrastructure to boost productivity in the economy and ensure an interest rate policy that is investment friendly.

LCCI stated this in a document titled: ‘ Economic and Business Review in 2017 and Outlook for 2018’ signed by its director-general, Muda Yusuf.

Other enablers suggested include: the alignment of procurement policies at all levels of government to support domestic investment, investment policy that would protect domestic investor and tax policy that is investment friendly.

According to the chamber, current reforms in critical sectors as power, agriculture, solid minerals and oil and gas should be sustained and the executive orders signed in May last year to be fully enforced to improve the way government does business and thereby improve the business environment.

While reviewing the economy last year, LCCI said it was mixed, noting that the economic downturn of 2016 continued into the early part of 2017.

“However, there was an upturn with the resumption of growth in the second quarter of 2017. Though the growth was very marginal at 0.55 per cent, it marked a significant turn of events. The economic outlook since then had remained positive, though the recovery and growth have been fragile. The non-oil sector recovery was somewhat slow because of issues of operating cost, investment climate and productivity faced by economic players. Indeed, the non-oil sector contracted by 0.8 per cent in the third quarter of this year. However, the trajectory for growth and investors’ confidence remains positive for 2018,” LCCI said.

On foreign exchange market, LCCI acknowledged that CBN’s periodic intervention in the forex market reduced the exchange rate volatility over the last two quarters of 2017.

“With the intervention, businesses witnessed improved liquidity of forex and stability of Naira against the dollar. Confidence is gradually returning to

the forex market and we hope that this would be sustained in 2018. However, economic players stated that it was impossible to access the foreign exchange at the official rate of N305 to the dollar. Crude oil prices in the international market and local production levels of crude oil remain the two key variables that would determine the sustainability of the current favorable FOREX regime.

“The multiplicity of exchange rates remains a concern because of the implication for transparency and roundtripping in the FOREX market. It is thus desirable to reduce the multiplicity of rates and the disparities in the rates to further deepen confidence in the market.

LCCI also commended the government on provision of power, it said remains at the heart of ease of doing business in Nigeria.