The Lagos Chamber of Commerce and Industry, LCCI, yesterday, warned that Nigeria was at the risk of slipping into economic stagflation unless urgent, necessary steps were taken to tackle the factors currently inhibiting the nation’s economic growth.
LCCI’s warning came on a day the Manufacturers Association of Nigeria, MAN, appealed to Imo and Abia State governments to promote industrial expansion and employment generation through the grant of tax holidays to manufacturers.
Director-General of LCCI, Dr Chinyere Almona, who gave the warning in a statement, also emphasized the need for the Federal Government to sustain its targeted interventions in critical sectors of the economy.
She stated: “The economy has continued to struggle with many inhibiting burdens like inflation, weak revenue generation, degenerated infrastructure, forex challenges, unsustainable cost profile seen in debt services and subsidy payments, and the daunting threats of worsening insecurity.
“The chamber is concerned that if we continue in this trajectory, the economy may bleed away into a stagflation, which will impact on production cost, job losses, worsened forex crisis, and dampened growth in the medium term.”
Reviewing the Gross Domestic Product, GDP, Second Quarter 2022 report recently released by the National Bureau of Statistics, NBS, LCCI highlighted some threats to the nation’s future growth that needed special attention.
It noted that the oil sector had consistently recorded negative growth for the ninth consecutive quarter, calling on the government to tackle the menace of oil theft and pipeline vandalism with sterner approach.
The chamber also lamented the comparatively low growth in agriculture (1.2 per cent) and manufacturing (three per cent) compared with other sectors that grew at above five per cent.
“This is also indicative of the threats facing these sectors that power Nigeria’s real sector. The woes in these two sectors are responsible for the frightening rise in our inflation rate. And with the excruciating burden from debt service, subsidy payments, and worsening insecurity, many more production activities may be constrained in the coming months,” the LCCI added.
Grant tax holidays to manufacturers, MAN pleads
Meanwhile, the Manufacturers Association of Nigeria, MAN, has appealed to Imo and Abia state governments to grant tax holiday to manufacturers to enable them expand their operations and create jobs.
The President, Manufacturers Association of Nigeria, MAN, Mansur Ahmed, made the appeal at the 35th Annual General Meeting of the Imo and Abia states branch of the body in Owerri.
He said: “Imo and Abia State governments should intensify efforts in encouraging investment in manufacturing by facilitating the establishment of industrial parks and granting such incentives as tax holidays to manufacturers to promote industrial expansion and employment generation.”
He pleaded with the Federal Government to “prioritise allocation of forex to the nation’s manufacturing sector, while the Central Bank of Nigeria should direct the commercial banks to transparently and diligently process Forex applications by manufacturers.”
While stressing the need for government to improve on the time taken to clear container/cargoes at the nation’s ports, Ahmed also called on the government to “enforce, evaluate and monitor the implementation of the Executive Order 003, to ensure compliance by Ministries, Departments and Agencies, MDAs, which should be cascaded to the local and state government levels.”
Welcoming the participants earlier, chairman of Imo/Abia branch, Dr. Jude Eluma, said: “Increase in price of diesel, input costs, lack of reliable public power supply, non-availability of forex for importation of raw materials and machinery, as well as daunting insecurity, have been the prominent issues bedeviling manufacturers’ functionality in the year under review.
“We need the conscious support of MDAs, both at the state and federal levels, to assuage our challenges, restore confidence and enhance ease in doing business in the states.
“Our state governments should intensity efforts to encourage manufacturers’ investments, with the aim of benefiting from the gains of the much talked about African Continental Free Trade Agreement, AfCFTA, as made in Nigeria products can help to positively drive Nigeria’s economy.”
The guest speaker and Director-General, Infrastructure Concession Regulatory Commission, ICRC, Mr. Mike Ohiani, who was represented by Dr. Amanze Okere, noted that poor and lack of adequate infrastructure, such as motorable roads and regular supply of electricity, had become a serious impediment to the manufacturing sector of the economy.
He said some of the present options for the government to solve the problem was to seek further repatriation of the nation’s funds stashed away abroad, raise more bonds and further privatize state-owned entrepreneurs.