LCCI worried about rising poverty triggered by high inflation

With Inflation rate averaging 11.25 per cent between January and September 2019, above Central Bank of Nigeria’s (CBN’s) preferred 6-9 per cent target and the 9.8 per cent target in the 2019 budget, the Lagos Chamber of Commerce and Industry (LCCI) has predicted that inflation rate will most likely trend higher in coming months.

The chamber attributed the outlook to the continued closure of the land borders, implementation of new minimum wage, proposed a hike in VAT rate, festive-related consumer spending and recent flooding incidences which might have affected harvesting of food crops.

The immediate past president of the chamber, Babatunde Ruwase, stressed that the increasing inflation may further worsen the poverty status of many which call for urgent concerns.

Meanwhile, the Organised Private Sector (OPS) has elected Mrs. Toki Mabogunje as president for the next two years following the expiration of Babatunde Paul Ruwase’s tenure, having served the Chamber in the same capacity in the last two years.

Ruwase at its 131st yearly meeting stated that the outgoing year was characterized by numerous opportunities, achievements and challenges.

“There were issues of high-interest rate, weak GDP Growth, weak consumer demand, traffic gridlock on Lagos port roads, border closure, forex exclusion list and insecurity in some parts of the country, among others. The economy was able to maintain a positive growth trajectory driven by the recovery of oil price for the most part of the year which gave a boost to the macroeconomic fundamentals. Nigeria remains a robust economy with a large market, abundant natural resources and a productive population.

“As a chamber, we have remained resolute in promoting polices that support private sector development and the progress of the economy. We were consistent in our policy advocacy and kept our promise of providing business development services to our members and the larger business community”, he added.

He highlighted that data from the National Bureau of Statistics (NBS) reveals that economic growth slowed to 1.94 per cent in second quarter of 2019 from 2.1 per cent in the first quarter, bringing half-year growth for 2019 to 2.02 per cent.

According to him, Nigeria’s economic growth has not grown fast enough to create opportunities for its populace growing at 2.6 per cent, saying that it is a cause for concern given its attendant impact on poverty and unemployment.

He pointed out that the naira has been relatively stable against the US dollar across different market windows, owing largely to the sustained intervention of the Central Bank of Nigeria (CBN) in the currency market.

“We believe the CBN’s continued injection of liquidity into the foreign exchange market to ensure stability of the naira is not sustainable, as a potential crash in global oil prices may weaken the CBN’s ability to defend the naira. Also, the multiplicity of exchange rate windows continues to promote arbitrage and deters foreign investment,” he warned.

He said Nigeria’s 15 point upward movement on the ladder in the 2020 World Bank’s Ease of Doing Business Report is Nigeria’s best performance since 2011, however commended the government on the attainment of this feat.

“However, we note the efforts of the present administration through the Presidential Enabling Business Environment Council (PEBEC) and series of Presidential Executive Orders targeted at improving the business environment. We believe that government still have enormous task of fostering an environment where entrepreneurs, small and medium enterprises can thrive better. Sound and result-oriented business regulations are critical for private sector development,” he stated.

He added: “While we attribute the improved ranking to the efforts of the Presidential Enabling Business Council Environment (PEBEC) towards making the business climate more enabling since the council was formed in 2016, we believe that Nigeria can further improve. Regulatory bottlenecks hurting businesses needs to be addressed, insecurity curtailed, infrastructure such as power and road fixed and efforts at ensuring access to credit by businesses vigorously pursued.”