LCCI asks FG to make credit available to MSMEs for production purposes
President, Lagos Chamber of Commerce and Industry (LCCI), Gabriel Idahosa, has urged the Federal Government to make credit available to businesses to support their operations and production lines. He further urged the Central Bank of Nigeria (CBN) to incentivise banks to allocate more credit to agriculture and agro-processing to improve the sector’s private investment and productivity growth.
Reacting to the dwindling credit allocated to the sector in the last quarter, he said concessionary rates, lower than CBN prevailing MPR, are a must for MSMEs, adding that the high lending rates make it challenging for businesses to access credit, especially as SMEs are the backbone of the economy.
Also urging the government to focus on improving real sector productivity with massive investment in infrastructure, reviving government-owned oil refineries and reducing bottlenecks in fuel supply, he said the government must adopt prudent fiscal policy measures and create a business environment that promotes non-oil export growth and competitiveness.
This he said, will boost export, diversify foreign exchange earnings, raise domestic revenue, increase business productivity and improve citizen welfare. “We urge the government to give more attention to the manufacturing sector by addressing factors contributing to the high cost of production, including high inflation, high interest rates, multiple taxation and volatile FX.”
On managing high inflation, he said they have several times, advised the government that rate hikes alone will not curb inflation without resolving the challenges of the real sector, which comprises the agriculture and manufacturing sectors.
“We recommend that monetary and fiscal authorities focus on the factors driving the inflation rates by tackling supply-side deficiencies instead of focusing too much on demand-side management,” he said.
Further urging the government to focus on boosting food production, targeted fiscal interventions and better management of Nigeria’s floating exchange rate regime, he regretted that the floating exchange rate policy adopted last year without any form of control is yet to show any result till now. “As an import-dependent nation, we need to consider better management approaches that fit the current profile of our economy. Boosting FX supply will also help strengthen the Naira if transactions in the FX market are transparent enough to reduce speculative activities,” he said.
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