Despite enjoying over two decades of unbroken democracy, the Lagos Chamber of Commerce and Industry (LCCI) has said that the nation’s business environment still remains a huge concern to investors, especially those in the real sector of the nation’s economy.
The Chamber in a statement, issued over the weekend and signed by its Director General, Dr Chinyere Almona, noted that weak infrastructure, uncertain policy environment, and institutions had continued to hinder the efficiency, productivity, and competitiveness of many enterprises in the economy, thereby posing a major risk to job creation and economic inclusion across sectors.
The business advocacy group lamented the present situation, whereby oil revenue constitutes more than 80 per cent of government revenue; thereby making the economy vulnerable to external shocks.
The Chamber added that despite the positive economic growth trend, over the last two decades, it had become imperative for the federal government to urgently address the weak government revenue base caused by oil theft and pipeline vandalism, rising and unsustainable debt profile, over-dependence on oil revenue, exposure to foreign shocks through inadequate forex supply and double-digit inflation, among others.
While acknowledging the resilience of the nation’s telecommunications sector, as evidenced in its growth, over the years, the body also called on the federal government to support the sector’s growth and create an enabling regulatory environment.
The Chamber lamented that despite the significant transformation of the financial services sector, the financial intermediation role of the banking system still remains below expectation, a factor, it stated, had constrained the sector’s impact on the economy.
“The financial services sector has been significantly transformed since independence through leveraging technology to enhance service delivery. The sophistication of the industry can compare with its counterparts even in advanced economies.
“However, the financial intermediation role of the banking system is still below expectation. It still has some weak linkages with many other sectors of the economy, which has constrained the sector’s impact on the economy from a systemic perspective,” LCCI stated.
The business advocacy group also called on the Federal Government to intensify its non-oil campaigns and interventions so as to sustain the targeted financing towards boosting non-oil export for enhanced foreign exchange earnings.
“ The non-oil sector grew by 4.8 per cent y/y in Q2 ’22 against 6.1 per cent y/y in Q1 ’22. Key drivers within the non-oil economy include transportation and storage (51.7 per cent y/y), finance and insurance (18.5 per cent y/y), telecommunications (7.7 per cent y/y), trade (4.5 per cent y/y), real estate (4.4 per cent y/y), construction (4.0 per cent y/y), manufacturing (3 per cent y/y), and agriculture (1.2 per cent y/y).
“Combined, these sectors accounted for 78.3 per cent of total GDP in Q2. We urge the Government to continue with the non-oil campaigns and interventions to sustain the targeted financing towards boosting non-oil export for enhanced foreign exchange earnings,” it added.
The Chamber also advised the government on the need to give more attention to transparency in the management of public finance, rule of law, separation of powers and the inherent checks and balances, quality and independence of democratic institutions, and citizen engagement in the democratic process, as the nation marked 23 years of uninterrupted democracy.
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