Deploy right mix of policies to stimulate real sector, operators tell FG
The Lagos Chamber of Commerce and Industry (LCCI) has urged the Federal Government to deploy a right mix of policies to achieve the desired outcomes, noting that short term outlook of the key economic indicators is not looking bright.
According to the chamber, there are quite a number of business environment issues that require attention, noting that the ease of doing business remains a major challenge.
The LCCI stated that the key cost drivers are the high energy cost, depreciating exchange rate, high cost of fund, high transportation cost, high transaction cost at the ports, high import duty, among others. LCCI President, Babatunde Ruwase, said these are surely not the best of times for the Nigerian economy, stating that there is a limit to which these costs can be passed on to the consumers, especially in the context of weak and declining purchasing power
Speaking at the chamber’s 2019 Presidential Policy Dialogue in Lagos, Ruwase said: “The major trigger of the economic downturn was the decline in oil price, as the economy is still largely dependent on the oil sector, both for revenue and foreign exchange earnings.
“This time calls for reforms in the economy. However, we believe that the Nigerian economy has strong fundamentals. The resources are enormous, the domestic market is large and the people are resourceful and enterprising.
“There are numerous potentials yet untapped. What is critical are the enablers. We need the right mix of policies to achieve the desired outcomes. I am aware that some policy choices have been made by the present administration to promote economic diversification, stabilize the foreign exchange market and promote small businesses”.He said evidently, there is still some work to be done, urging the need for regular engagements and communication on policy issues to ensure quality feedback and enrich the policymaking process.
He recommended that the engagements should cover macroeconomic policies, sectoral policies.“These will include foreign exchange policy, Trade policy, Tax policy, Energy policy, transport policy, Industrial policy, Agricultural policy, ICT policy, among others. Some of these are cross-cutting, while others are sector-specific. The message is that regular engagement with relevant stakeholders in the various sectors will bring a lot of value,” he stressed.
The LCCI boss stated that multiple taxations remain an issue with many companies, saying that there are also issues of multiple levies and fees by government agencies at the federal, state and local government level. He lamented over the announcement increase in VAT from 5 per cent to 7.5 per cent, warning that it would no doubt put additional pressure on businesses because consumer purchasing power is already weak.On the closure of the land borders, Ruwase said the move by the federal government has enormous implications for cross border economic activities around the country.
“The indications are now that the closure is indefinite. While we share the concern of the government on issues of security and smuggling, we believe that the indefinite closure of land borders is not the solution to the problem,” he said.
On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, said the present administration was working towards addressing the concerns raised by the stakeholders.He added: “We are focused on addressing the challenges which exist in our business environment. Many government regulatory agencies are on a continuous process of formulating different initiatives that address huge areas of concern which includes, the need for modern infrastructure, power supply and good road networks across the country, the need to increase local patronage.need to ease doing business, increase access to small and medium enterprises and address multiple taxation.
We will continue to engage the LCCI and the organised private sector to come up with policies to encourage investment and improving the ease of doing business in the country.”