The Lagos Chamber of Commerce and Industry (LCCI) has projected that the Nigerian economy will end the year with a positive growth of three to four per cent.
Dr Michael Olawale-Cole, president, LCCI, said this at the LCCI 134th Annual General Meeting (AGM) on Thursday in Lagos.
The LCCI president stated that achieving the chamber’s projected growth required the fiscal and monetary authorities to promote policies to encourage private capital inflows to the economy.
He said fiscal and monetary authorities must develop a medium-term growth plan anchored on boosting local production, supporting ease of doing business and attracting private investment.
Olawale-Cole added that the authorities must also develop physical and soft infrastructure, business-friendly regulatory policies, economic diversification and employment generation, among others.
Addressing the country’s Gross Domestic Product (GDP) third quarter growth decline of 1.78 per cent year on year, the industrialist said the development was reflective of the challenging economic conditions.
He, however, posited that the annual GDP growth would close on a positive note for the year.
“It should be noted that emerging shocks, threats, and risks have created fears of slowing growth and even recession in the coming quarters going into the new year 2023.
“With the worsening security challenges in some parts of the country, foreign exchange scarcity, and high energy costs, growth may shrink as production bases come under siege, and supply chains disrupted leading to scarcity of goods in the markets.
“With worsening security perception about the country, and the coming of a new government, foreign investors are not interested in bringing in Foreign Direct Investments (FDI) to Nigeria at this time.
“We have, however, in the course of the year, advocated for a well-coordinated synergy between the fiscal and monetary authorities, as well as members of the private sector in navigating the uncertain economic terrain.
“We would continue to engage with the government in creating an enabling business environment where the private sector is empowered to create jobs and generate revenue for the government,” he said.
Olawale-Cole projected that inflation would sustain its double-digit level in the short to medium term.
This, he explained, was largely driven by persistent food supply shocks, foreign exchange illiquidity, higher energy costs, speculative spending based on the naira redesign policy, insecurity and electioneering campaign spending.
“These structural factors will continue to mount pressure on domestic consumer prices,” he said.
Addressing the power sector, the LCCI president noted that the frequent collapse of the national grid showed that it could not supply sufficient power to meet the electricity demand of Nigerians.
He added that the sector recorded issues of vandalisation, disrupted gas supply, inability of distribution companies to take up generated power and the challenges of achieving 100 per cent metering for power consumers.
“With the cost of diesel at record levels and persisting poor power supply, businesses are running on unsustainable costs and producing at uncompetitive prices.
“This can lead to job losses if the output is constrained due to the unbearable cost of production.
“If not quickly tackled, these challenges will likely subdue the GDP growth potential and projections for 2022.
“The most sustainable solution to Nigeria’s power shortages is the transition to renewable energy and the decentralisation of the national grid,” he said.
Olawale-Cole said the activities of the chamber’s service committees and sectoral groups were sustained during the year in spite of the numerous challenges of the business environment.
According to him, all the committees and sectoral groups performed very well and the achievements recorded could not have been possible without the support and cooperation of everyone.
“I, therefore, would like to express my sincere appreciation for your cooperation and commitment to the promotion of the noble cause of our chamber.
“Our chamber is now the institution of first choice when foreign diplomatic missions, investment promotion agencies and business associations are seeking institutional partners to promote investment and trade between Nigeria and their various countries,” he said.