President Lagos Chamber of Commerce and Industry LCCI, Mrs Toki Mabogunje has said that the continued closure of Nigeria land borders with neighbouring countries is adversely affecting medium and small scale industries across the region. At a virtual Presidential policy dialogue she said “Closure of the land borders has enormous implications for cross border economic activities around the country. The indications are now that the closure is indefinite. While we share the concern of government on issues of security and smuggling, we believe that the indefinite closure of land borders is not the solution to the problem.
“We are excited about the signing of the AFCTA. But we need to get ourselves ready for the pressure of competition inherent in the continental economic integration agenda. A number of commitments were made about the creation of an environment that would enable the private sector to be competition ready. But not much has happened in this regard so far. We are aware of the efforts of government to fix our infrastructures, including roads and railways, but funding has remained a major challenge. We would like to see a new funding model with much bigger focus on private sector capital within a Public Private Partnership [PPP] framework for infrastructure development in the country. The slow pace of reforms in the oil and gas sector, especially the fact that the Petroleum Industry Bill could not make it through the eighth National Assembly is a cause for worry. And the part that was passed was not signed by the President. This has affected the growth of the sector.
“Failure of the Nigerian Customs Service to adhere to the Executive Order which forbids customs checkpoints around the ports and within given geographical delimitations in the country is also a cause for concern. Am sure in the course of the dialogue, other matters will be raised. Your Excellency sir, at a time like this, we should do all that we can to attract private capital, both from the domestic economy and the global investing community. We are aware that there are huge financing gaps, especially in the infrastructure delivery. Challenges of funding the economy and the operations of government is a major cause for concern. Investment climate issues and cost of doing business are very critical issues that need to be tackled as the ease of doing business remains a major challenge. The key cost drivers are the high energy cost, depreciating exchange rate, high cost of fund, high transportation cost, high transaction cost at the ports, among others. There is a limit to which these costs can be passed on to the consumers, especially in an environment of weak and declining purchasing power.
She also said These are surely not the best of times for the Nigerian economy and for our businesses as the effects of the Covid 19 disruptions have been very profound. The short-term outlook of the key economic indicators is not looking bright; however, we are hopeful that we would turn the corner sooner than later. As we all know, the major trigger of the economic downturn was the Covid 19 induced slump in oil price, resulting in the plunge of both revenue and foreign exchange earnings. Besides there were serious disruptions in the supply chains with consequential dislocations to many production processes. The liquidity crisis in the foreign market has reached a scary level reflecting in acute foreign exchange scarcity, sharp depreciation in the exchange rate, widening parallel market premium and weakening investors confidence.
“However, we believe that the Nigerian economy has some strong fundamentals. Our natural resources endowments are vast, the domestic market is large, and our people are resourceful and enterprising. What is missing are the enablers. Times like these offer tremendous opportunities for innovation, creativity, export growth and import substitution. These are the silver linings in the current economic downturn. Let me at this stage acknowledge the spirited efforts of the federal government to fix the Nigerian economy. An Economic Sustainability Plan with a financial commitment of N2.3 trillion has been put in place to support vulnerable sectors and create jobs. The plan was the outcome of the efforts of the Economic Sustainability Committee, Chaired by His Excellency the Vice President, Prof Yemi Osinbajo. We therefore cannot have a better person to interact with us on this and other business and economic issues.
I would like to underscore the need for regular engagements and communication on policy issues to ensure quality feedback and enrich the policy making process. This should cover macroeconomic policies, sectoral policies. These will include foreign exchange policy, Trade policy, Tax policy, Energy policy, transport policy, Industrial policy, Agricultural policy, ICT policy, among others. Some of these are cross cutting, while others are sector specific. Regular engagement with relevant stakeholders in the various sectors will bring a great deal of value to the economic management process. The regulatory environment also needs to align with this vision. This policy dialogue is our contribution to this process”.
