President Lagos Chamber of Commerce and Industry Mrs Toki Mabogunje
has said that governments at all levels should in 2021 aim at deepening Investor Confidence among other policy measures. According to her “investor confidence in the Nigerian economy weakened further in the previous year due to aggravated fiscal and external risks precipitated by pandemic-related disruptions. This is reflected in the sharp decline in foreign capital inflows to the Nigerian economy to $8.61 billion between January and September 2020, compared with $20.19 billion in the corresponding period of 2019. Going into 2021, The Chamber tasks policymakers to pursue an investment-led growth strategy. Economic growth strategy must be private capital-driven given its multiplier effect on the economy. As the fiscal and monetary authorities are putting in place measures to drive recovery, it is imperative to consolidate these efforts by implementing key structural reforms including recalibrating the country’s foreign exchange management framework and ensuring consistency in the policy environment to bolster investor confidence.
“Normalise Foreign Exchange (FX) Market: While the Lagos Chamber appreciates efforts of the Central Bank of Nigeria (CBN) in preserving the scarce foreign exchange resources at a time the country is faced with relatively lower oil price and production, we reiterate our position that a disproportionate reliance on demand management strategies is not a sustainable solution to the recurring foreign exchange crisis. In year 2021, we urge the CBN to de-emphasise demand management policies and intensify efforts in improving the supply side of the foreign exchange market. We welcome the CBN’s recent policy stating that beneficiaries of Diaspora Remittances should be paid in foreign exchange. The policy is a step in the right direction in resolving the liquidity issue in the currency market by ensuring availability of foreign exchange, especially at the retail segment. This should be replicated for other sources of inflows such as export proceeds, Foreign Direct Investment [FDIs], and Foreign Portfolio Investments [FPIs]. Robust remittance inflow is expected to moderate FX pressure and narrow the wide parallel market premium as economic agents would have access to a harmonised rate. A unified FX framework is necessary to boost investor confidence”.
Continuing She said “the Chamber express its grave concerns about the rising spate of insecurity in the country. Several lives have been lost to the activities of the Boko-Haram sect in the Northern part of the country, even as properties worth billions of Naira were destroyed in the process. It is depressing that Nigeria is ranked as the third most terrorised nation in the world, and first in Africa, according to the Institute for Economics and Peace (IEP). Heightened insecurity has profound implications for the nation from business, commercial and investment points of view. These occurrences have continued to project Nigeria as an unsafe and insecure destination for private investment. We therefore call for an urgent review of the current security strategy to fix the worsening security situation. The burdensome process of cargo clearing at the ports and the attendant extortions continues to stifle productivity of the real economy. Port operations at Apapa and Tincan ports have worsened the plight of many importers, exporters, traders, and manufacturer, as movement in and out of the ports remain a challenge. Haulage fees have skyrocketed due to the cumbersome ports and document processes which has made port users incur more cost. Outside the ports, manufacturers and other importers face serious challenges in conveying their cargo from ports to warehouse due to multiple checkpoints and traffic gridlock.
“Despite series of interventions by the Federal Government, persistent gridlock in accessing port facilities and perennial congestions at the ports has remained a recurring theme in the business environment. More worrisome are the issues around lack of credible framework for dispute resolution on import classification and valuation, presence of several agencies with duplicated roles, etc. Inadequate cargo handling facilities is also an issue of concern. The Lagos Chamber calls for swift intervention of the government in the identified areas. There is need to accelerate efforts in procuring electronic scanners to ease the rigorous process of consignment clearance. While the Federal Government has done well in developing rail infrastructure, there is need to have an effective multi-modal transport infrastructure around ports to ease pressure on road infrastructure. Since inception [over three decades ago] the capacity of Apapa and Tincan ports have not been expanded to accommodate the continual increase in the country’s economic activities. It is equally necessary to decongest these ports by developing other ports. Regarding the issue of arbitrariness of import valuation and classification by Customs operatives, we request the Federal Government to undertake an urgent review and reform of custom processes to bring it in alignment with government policy on Ease of Doing Business.
According to LCCI “With the persistence of the global pandemic into year 2021, the global and domestic economy is at the risk of disruptions to business operations as mitigation measures aimed at containing the virus will be sustained by government authorities. This underscores the need for businesses, entrepreneurs, and investors to be strategic in their approach this year. The following are noteworthy: The need for business and investment community to properly understand the dynamics of the operating environment to be able to manage risks in the new year. The need for businesses and investors to prioritise cost optimization to foster competitiveness. Investors and policymakers must deepen import substitution and backward integration efforts as heavy dependence on imports is unsustainable. Businesses must be technology-driven in their approach to ensure cost effectiveness and competitiveness. A time like this require business owners to be creative and innovative. It is important for members of the business community to join an advocacy body like the Lagos Chamber of Commerce & Industry (LCCI) to give their businesses a voice.
“The Lagos Chamber congratulates Mr. Joseph Robinette Biden Jr. on his assumption of office as the 46th elected President of the United States of America. We believe the Biden’s Administration will usher in a new dispensation for the global economy from trade, investment, foreign policy, international cooperation, environmental protection, and security. We commend the Biden administration for lifting the immigrant visa ban placed on Nigerians. This reversal is positive for the Nigerian economy as it creates avenue for many Nigerians to explore diverse business, educational and employment opportunities in the United States. This gesture is expected to boost US Nigeria trade relations. It would also positively impact on diaspora remittances inflows to the Nigerian economy in the medium term given that US is a major source of Remittances proceeds to Nigeria. As a multilateralist, we expect the Biden-led administration to foster international cooperation across the globe. We expect the new administration to recalibrate the global trade system that has been marred by rising protectionism, trade wars and pandemic-induced supply chain disruptions. We also seek the support of the Biden-led administration for the candidacy of Dr [Mrs.] Ngozi Okonjo-Iweala for the Director-General position at the World Trade Organization. This is even important as the global economy needs to improve trade volume to quicken economic recovery.
