Nigeria’s Economy StillVulnerable to Shocks, LCCI Insists

The Lagos Chamber of Commerce and Industry (LCCI) has said the nation’s economy is still vulnerable to external shocks due to fluctuations in global oil prices.

President LCCI, Mrs Toki Mobogunje, said this yesterday at a press conference on “State of the Nigerian Economy” held in Lagos.

She said that the mono-product nature of the economy would continue to expose the nation to volatility in the global oil market with its attendant consequences on the economy.

Mabogunje called on the federal government to intensify diversification efforts and embrace structural reforms to attract private investment and stimulate economic growth.

According to her, businesses still struggle to survive owing to multiplicity of levies, infrastructure challenges, sluggish growth, excessive regulation, high cost of credit and unfavourable government policies.

She said the challenges confronting growth of businesses had remained in spite of the country’s upward movement by 15 places in the ease of doing business ranking.

The LCCI president advised government to vigorously implement friendly policies to support expansion of businesses.

Speaking on inflation, Mabogunje advised the government to stem rising consumer prices through increased investment in infrastructure, especially power and transportation.

This, she said, would help bridge the supply gaps and reduce transportation costs.

“The rate at 11.98 per cent in December makes that the fourth consecutive month of rising inflation.

“Rising inflation has a profound welfare effect on citizens as it weakens purchasing power, as heightened food inflation naturally escalates poverty conditions.

“Policy makers need to worry about the increasingly intense inflationary conditions, especially the food component of inflation,” she said.

Addressing foreign exchange and external reserves, Mabogunje said that the approach of supporting the reserves with foreign portfolio investment was unsustainable.

She said there would be problems if portfolio investors developed apathy for Nigerian assets.

The LCCI president also noted that the current security situation in the country had devastating implications for business activities, economic growth, food production and investment.

She urged government to ensure a concrete and sustainable means of reducing youth employment by stimulating investment across all sectors of the economy.