FG’s $1trn GDP projections not sufficient, may fail — LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has stated that the macroeconomic projections in the Federal Government’s (FG) Medium Term Expenditure Framework (MTEF) are not sufficient to achieve the $1 trillion economy target it set to achieve by 2029.

The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, had, last weekend restated the commitment of the government to realizing the GDP target.

But in a review of Cardoso’s statement the Director General, LCCI, Dr Chinyere Almona, explained that the basis for the government’s projection contains some inconsistencies that will make it unachievable.

She stated, “LCCI is aware of the enormous challenges and the uphill task before the CBN in ensuring macroeconomic stability and restoring investors’ confidence.

“However, we note the inconsistencies between the federal government’s vision of achieving a $1 trillion economy in the next six years and the MTEF.

“The macroeconomic projections in the MTEF state that the economy will grow by 3.76 percent, 4.22 percent, and 4.78 percent in 2024, 2025, and 2026, respectively. We note that the projected growths are sub-optimal to achieve a $1trillion GDP by 2029, which implies an average growth of 21 percent over the next six years.”

Almona commended the CBN’s plan to review the minimum capital base of banks, but cautioned the apex bank to strengthen its banking supervision to avoid “too big to fail” banks.

She, however, stated, “The Chamber appreciates the intellectual humility of the Governor in admitting the errors or mistakes of the past, particularly in the areas of corporate governance failures, diminished institutional autonomy of CBN, deviation from the core mandate of the bank, and unorthodox use of monetary tools and foray into fiscal activities under the cover of development finance activities. As we advance, we challenge the current CBN team to ensure professionalism and integrity and rebuild the trust of the general public.

“On recapitalisation of banks, we commend the plan of CBN to review the minimum capital base of banks due to consistent devaluation of the Naira, which has eroded the capital base of banks, attracted significant investment into banks as well as increased the capacity of banks to provide the required support for the economy. However, we caution the CBN to strengthen its banking supervision to avoid ‘too big to fail’ banks.

“Given the sensitivity of monetary policy and price stability, we urge the CBN to ensure transparency and synergy between monetary and fiscal authorities and effectively communicate significant changes in policy direction.”