The administration of President Muhammadu Buhari received a knock from the Lagos Chamber of Commerce and Industry, LCCI, as it said the nation’s economy has suffered severe decline under it in the last one year.
The LCCI, in a report released on Friday in Lagos, said the woeful outcome of the nation’s economic performance was the result of “the absence of well structured, broad-based and synergized economic blueprint with clearly stated goals, plans, policies and strategies to drive the economy.”
The Chamber also stated that the economic policy space remained unclear and that the policy conception was faulty, hence, policy coordination and implementation suffered serious setback.
The LCCI report states: “There is, therefore, urgent need for central policy strategy with detailed and well-designed policy direction. This is critical to effective and efficient coordination and implementation of policy.
“While the policy goal of eliminating corruption is laudable, the need for concerted effort on the side of the government with respect to policy, legal and regulatory environments in order to boost private sector participation is highly desirable.
“Improving the ease of doing business through efficient business environment vis-à-vis effective infrastructure in all facets of the economy is pertinent.
“It is imperative to make very strong moves to resolve the weakening oil revenue and find creative ways of incentivising forex inflow to Nigeria so as to boost liquidity and ease access to forex through alternative sources such as FDI in critical sectors of the economy and diaspora remittances.”
According to the report, the Gross Domestic Product (GDP) of the country which stood at 2.35 per cent in May 2015 when the current administration took office, has now crashed to -0.4 per cent (negative growth) in May 2016.
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On the official exchange rate of the dollar to the naira, the chamber noted that in May 2015, $1 exchanged for N197.9, while in 2016 a dollar is N199, but in the parallel market, according to the Chamber, a dollar was N219 in May 2015 but depreciated to about N350 in May 2016.
On the way out of the current economic crisis, the LCCI said: “We observed remarkable success in containing Boko Haram insurgency by pushing them from taking territories and local councils to the fringes of Sambisa Forest. As the final clearing of Boko Haram continues, we urge the government to extend its attention to the growing security breaches coming from groups such as the armed herdsmen and the Niger Delta Militants. Businesses and the private sector can only thrive in a peaceful and secure environment.
“Anti-corruption war of the present administration should continue unabated and we are happy that emphasis is being placed on recovering looted funds both from within and outside the country. It is our wish that government reviews its processes and put in place reforms including frameworks that would inherently curb corruption.
“We welcome Government’s recent removal of subsidy on kerosene and PMS. However, we call for full deregulation of the downstream petroleum sector. This will reduce distortions in the downstream oil industry, eliminate corruption that has marred the sector over the years, increase government revenue whilst empowering the government to fund infrastructure and other social interventions.
“We welcome the decision of the Central Bank of Nigeria (CBN) to adopt a flexible exchange rate regime which is desirable in the light of prevailing economic realities. There is however, a need for clarity on what the CBN describes as a special window for critical transactions for which preferential rates will apply. We would like to caution against possible abuse and distortions that such a window could create. On the immediate, relaxing the impediments that will allow liquidity to flow into the autonomous forex market is desirable.
“The Budget has been signed into law after about four months of delay. We expect marginal recovery in economic activities as soon as disbursement of capital projects and social intervention programmes start. The 2016 budget assent and implementation should give rise to positive macro environment. However, inflationary impact remains a concern as the presidency will become more practical in its quest to deliver on some critical electoral promises.”
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