Rising security concerns compounding Nigeria’s economic woes, says NACCIMA
With a decline in investment inflow and domestic food production challenges aggravated by rising security concerns, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has asked the Federal Government to address insecurity issues for the economy to thrive.
According to the chamber, Nigeria is currently facing a risk of decline due to the perception of Nigeria as having an investment climate that is unfriendly to business.
Citing recent data from the National Bureau of Statistics (NBS) on the decline in foreign investment by as much as 81 per cent, NACCIMA noted that a loss of Foreign Direct Investment is just one dimension in which the economy is affected by insecurity.
NACCIMA President, Ide Udeagbala, yesterday, stated that domestic food production is at risk and there is a dimension of insecurity that is contributing to rising production costs and reduced consumption of goods and services.
According to him, the security situation in the country demands urgent and serious attention.
Udeagbala stated that these are uncertain times, necessitating the need for the Federal Government to quickly address the increasing insecurity challenges, poor infrastructure, irregular power supply and increasing inflation rates which have remained a threat to businesses and investments in the country.
Addressing the issues, according to him, will hopefully help to project the country as a safe destination for investment.
The chamber noted that while the decision of the Monetary Policy Committee of the Central Bank of Nigeria to raise the Monetary Policy Rate from 13 per cent to 14 per cent is welcomed, it stated that the measure is majorly an inflation management measure and does not address the root cause of the inflation itself, which is rising food prices brought about by a number of factors, including the devaluation of the naira and the cost of energy which has affected production and transportation.
Udeagbala stated that as the private sector awaits the progress of the Presidential Power Initiative, immediate intervention is required in the oil and gas sector which the private sector depends on for production and transportation needs.
“Automotive Gas Oil (AGO), also known as diesel, and Jet A1 fuel have become prohibitively expensive, forcing a lot of enterprises to shut down or scale down their operations. The situation puts to question the readiness of Nigeria to compete in the global economy, especially under trade agreements like the AfCFTA.
“If urgent action is not taken, the resulting noncompetitive nature of the Nigerian private sector will cement Nigeria as a “consumption-only” economy, a dumping group for all manner of foreign goods and services.
“To this end, we call on the government to renew focus on implementing policies that ensure that our country is energy sufficient, becomes a net exporter of petroleum products and eventually, electricity.
“We can start by taking a look at other developing countries in this space, such as Trinidad and Tobago, who have never had cause to carry out “turnaround maintenance” on their only refinery or revisiting crude oil to petroleum product swap arrangements. The point to be made here is that the issue of subsidy should not be ignored any longer,” he added.