LCCI urges CBN to sustain concessionary credit to private sector to cushion inflationary pressure
The Lagos Chamber of Commerce and Industry (LCCI) has urged the Central Bank of Nigeria (CBN) to sustain concessionary credit to private sector to cushion inflationary pressure.
Delivering an address recently on the state of the economy for Q1, 2024, Mr Gabriel Idahosa, the President of LCCI noted that the foreign exchange market depreciated in all parameters in Q4, 2023, reflecting the huge FX obligations, sub-optimal crude oil production and declining capital importation.
According to him, this has resulted in low earnings in foreign capital inflows, thus exacerbating the demand pressure at the foreign exchange market.
He expressed concern over the decline in capital importation into the country and the structure in place to attract investment inflows. Total capital importation into Nigeria declined by 36.5 percent to $654.65 million in Q3,2023 from $1.03 billion in Q2, 2023.
Examining the monetary policy approach of the CBN, Mr. Gabriel Idahosa called for the sustenance of targeted concessionary credit to the private sector and MSMEs, while it embarks on monetary policy tightening.
He noted that external factors that affected monetary policy in 2023, include the tightening approach of major Central Banks in the world that led to persistent inflationary pressures, declining external reserves and consistent exchange rate depreciation in the domestic economy.
Speaking further on the inflation regime in the country, he said, “Increasing the monetary policy rate has, thus far, proven to be insufficient in taming inflation. Therefore, there is a clear need for the government to strengthen its support to critical sectors like agriculture, road infrastructure, power, energy, etc. It should also look at ways to improve supply chains and cushion the cost of production.”
At the 2023 annual banker’s dinners organised by the Chartered Institute of Bankers in Nigeria, CIBN, the Governor of the Central Bank of Nigeria believed foreign exchange reserves could be rebuilt to comparable levels with discipline and focused commitment.
