The Lagos Chamber of Commerce and Industry (LCCI) has lauded the recent step by the Federal Government in approving import duty waivers for 150 days on selected food items.
The LCCI President, Mr Gabriel Idahosa, gave the commendation at the chamber’s state-of-the-economy quarterly news conference on Thursday in Lagos.
Idahosa said: “We, however, urge the government to focus more on boosting the supply side and drop the idea of a recommended retail price for food items.
“In a free market economy, the forces of demand and supply will always determine prices.
“While we support promoting and empowering local production, emergency interventions like this are not out of place since they are meant to fill a gap that local production capacity cannot achieve in the short term.
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“More direct and targeted interventions should be focused on agricultural mechanisation, agricultural research, the adoption of lower import duty exchange rates used to import agricultural input, and the establishment of more functional agro-industrial hubs across the country.”
He urged the Central Bank of Nigeria (CBN) to be consistent with foreign exchange market reforms until the desired impact on rising inflation rate and burdening high interest rates are achieved.
Idahosa noted that the quarterly state-of-the-economy conference had become the chamber’s traditional model of public policy advocacy to engender a stronger economy and a more business-enabling environment.
He also urged government to tackle the problem of insecurity, noting that it had continued to threaten productive activities in the real economy sector.
He stressed that the call was pertinent because more could be done to achieve a safe environment for businesses and livelihood, thereby restoring good economic performance to the country.
The LCCI president noted that the global economy in the second quarter experienced persistently high inflation, aggressive global monetary policy tightening and supply chain disruptions.
He added that the global economy also experienced growing uncertainties amidst geopolitical tensions.
The LCCI president noted that while inflation rates were easing in America and China, Nigeria’s inflation rate continued to rise with no positive projection yet on when it would peak and start to ease.
“The manufacturing sector also continued to struggle, recording a weak growth of 1.49 per cent in the first quarter due to weak consumer demand, high cost of production due to foreign exchange illiquidity and high interest rate, among others.
“We recommend that the CBN explore alternative policy measures that promote credit access, stimulate investment and support entrepreneurship.
“This can include targeted interventions such as concessional lending facilities, loan guarantees, and interest rate subsidies tailored to the needs of small businesses and key sectors of the economy like agriculture, manufacturing, power and technology.
“On power supply, the government should create the needed environment where local meter manufacturing can thrive to bridge the current gap in meter deployment.
“Other areas of intervention could be adopting a cheaper duty rate for importing agricultural inputs for local manufacturing and investment in building agro-industrial hubs across the country,” he said.
Addressing economic happenings in the second quarter of the year, Idahosa noted increments in parameters across monetary policy developments.
He recommended that the Monetary Policy Committee (MPC) should consider an easing disposition to interest rates in the face of multiple burdens on businesses.
According to him, the recent hikes in rates had directly translated into higher interest rates, making it more expensive for businesses to access credit for working capital, expansion and sustainability.
