as LCCI advocates heavy infrastructure investment to boost productivity
The Organised Private Sector (OPS) says the goodwill Nigeria enjoyed
at the inception of President Muhammadu Buhari’s administration is
beginning to wane on back of foreign exchange challenges, which crimp
businesses and the economy.
The OPS, however, said there had been positive developments such as
improved power supply, aggressive war against terrorism and
anti-corruption crusade.
At the third quarter press conference and economic review held on
Wednesday in Lagos, Remi Bello, president, Lagos Chamber of Commerce and
Industry (LCCI), said the monetary measures so far adopted were taking a
huge toll on investors in the free trade zones, saying there was a risk
of international isolation of Nigeria if current policies were not
reversed.
So far, the CBN has taken a number of monetary measures to save the
naira and the foreign reserves, which have been on the downward spiral.
The apex bank has restricted use of export proceeds and importers of 41
items from accessing foreign exchange (FX) from the Nigerian markets.
The bank has also tightened the FX procedures and set rules on
domiciliary account to save the economy.
But the economy is now faced with a scenario where there is a much
greater pressure to move funds out of the economy than bring funds into
the economy, Bello said.
“Round tripping of forex has continued to flourish because of the
disparity in the exchange rate between the official and parallel market.
“Small businesses have moved to neighbouring countries to effect
transfers to their suppliers abroad. Many companies are on the brink of
collapse because of failure to access FX for raw materials and other
critical inputs. Even companies whose inputs are valid for FX also
suffer the same fate,” the LCCI boss said.
He urged the president to intervene before further damage was done to
the private sector and the economy, suggesting that the naira exchange
rate should be allowed to reflect the fundamentals of the market.
“A rate that market fundamentals cannot support would not be
sustainable. We suggest the adoption of a market approach with a
periodic intervention by the CBN as the capacity permits,” he suggested.
He said exporters should be allowed to have unfettered access to
their proceeds, saying that the current policy regarding export proceeds
was a disincentive.
He further pointed out that the apex bank should engage with relevant
economic ministries in order to bring about coherence in the management
of the Nigerian economy.
Some of the problems the country faces relate to the problem of poor
productivity, he said, urging the Federal Government to accelerate
investment in infrastructure and build quality institutions for better
productivity in the country.
By ODINAKA ANUDU
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