The Nigerian economy is growing, but the reality with the common man is that life is more difficult. Are we seeing an impact of the numbers on living conditions?
Yes, beyond the SNB’s GDP figures each quarter, we need to look at how the high rate, double-digit inflation at 17.38% and unemployment rate at 33% are affecting the standard of living in the country.
GDP figures indicate the level of activity in the economy, but it also does not define the standard of living of the population. We need to tackle the factors driving the inflation rate, high unemployment and precariousness.
What do you think of the current exchange rate management strategy of the Central Bank of Nigeria (CBN)?
The CBN has constantly tried to increase the supply of foreign currency to make the foreign exchange market liquid. But we have a case where the forex supply does not meet the demand and this has put persistent pressure on the naira leading to its weak position against major currencies. Many companies are now sourcing foreign currency from parallel markets at over N525 per dollar. We need to stimulate the supply of the foreign exchange market by increasing inflows from exports, diaspora remittances and gross income.
Although Nigeria is not new to trade deals, it has yet to be able to fully maximize the AfCFTA as many manufacturing companies are not yet participating. What could have caused this? How can it be corrected?
The AfCFTA has not operationally taken off even though the agreements and articles have been approved by the participating countries. There are still administrative hurdles to be resolved for the Accord to take off effectively. In the meantime, Nigeria needs to support businesses with infrastructure support to produce competitively priced products to make their products competitive in the continent-wide market.
Nigeria is currently experiencing a worrying increase in costs. The federal government’s plan for Nigeria’s participation in the African Continental Free Trade Area (AfCFTA) is to capture 10 percent of Africa’s imports as well as double the country’s export earnings by 2035. The government also wants to become the preferred provider of value-added products and services to Africa.
LCCI recently organized workshops on the theme: “AfCFTA: The Roadmap for Successful Exporter Participation”. The strategic objective would be achieved by increasing the export capacity of each state in the country to $ 1.2 billion as well as focusing on specific product / service chains where states have a comparative advantage and endowments. resources. The focus is on processed agricultural products, services and manufactured products.
Vice President Yemi Osinbajo revealed that Africa’s informal cross-border trade is worth $ 93 billion. What efforts should the government put in place to help the transition from the informal economy and exploit the opportunities of the sector?
In order for players in the informal cross-border sector to move into the formal sector, we need to have clear and easy-to-follow procedures on cross-border trade with all kinds and sizes of businesses involved in cross-border trade. Many of our borders are unguarded, which leaves room for smuggling and as long as smuggling is lucrative and savage, most of the actors in this space will like to remain informal. We have oil that sells for higher prices in our neighboring countries, which motivates the movement of this product across borders at all costs.
The FG has taken steps to improve the ease of doing business in Nigeria. Do you think the measures are ambitious enough to facilitate business and investment?
The country has recorded improvements in its business environment, especially over the past five years, based on the World Bank’s assessment through its Doing Business Index. Nigeria’s ranking was 131 out of 170 countries in 2020, up from 170 out of 189 countries in 2016. We also saw improvements in the World Bank’s subnational Doing Business assessment. The top three subnational performances in 2020 were Gombe, Sokoto and Jigawa. There is a difference between registering a business and running a successful business. Thus, the index will measure the time it takes to register a business as a positive rating but it does not measure the survival of a business. We expect that more will be done to address the perennial issues that have plagued businesses in Nigeria, such as the supply of electricity, access to cheap finance, the scarcity of forex, and the high rate of inflation. .
MSMEs in Lagos complain that they are being stifled by multiple accusations. Are you involved in any form of commitment to harmonize taxes and fees for these small businesses in the state?
In the chamber, we have regular engagement with the state government on issues affecting our members. The chamber was well represented at the 7th Lagos Corporate Assembly held on August 26, 2021 where we presented various issues affecting the business community. Generally speaking, in recent years our advocacy efforts as a chamber have focused on better exchange management; the implementation of essential port reforms; improve access to finance for businesses, especially MSMEs; exploring a public-private partnership for infrastructure development; the implementation of structural reforms in critical sectors to achieve inclusive and sustainable growth; and ensure a friendly and supportive regulatory environment at national and subnational levels.
What are the economic prospects?
The outlook looks good but with concerns about insecurity, scarcity of foreign exchange, unemployment and double-digit inflation. Ongoing reforms should be concluded on high notes to improve the ease of doing business in Nigeria. The immunization program should also be improved with the provision of more vaccines. Growth prospects are high but can be disrupted by insecurity, logistical challenges, difficulties in sourcing foreign currency, etc. we need to pay attention to growth and job rich sectors like agriculture, construction, commerce, entertainment and technology.
What are your plans for the chamber as CEO?
I am a seasoned professional with a wide range of experience. As CEO of LCCI, I am responsible for developing and leading the implementation of the strategy to ensure the achievement of the Chamber’s objectives while ensuring and managing the growth and development of the institution.
I intend to build on the successes of my predecessor, by strengthening stakeholder engagement and advocacy with various branches of state and federal government. It is also essential for me to diversify and increase the revenue sources of Chambers and to improve efficiency and service delivery to members in order to increase member engagement. With the support of my team, I will improve the visibility of the Chamber through regular programs and active use of social media. Having worked in various sectors of the economy and in international development, with a strong network across Africa, I will be leading outreach to the rest of Africa, supporting our members on the AfCFTA journey. In addition, LCCI has already initiated the annual AFRICA HALL and AFRICA SPECIAL DAY projects to contribute to the growth of trade on the African continent at the annual Lagos International Trade Fair.