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Tag: LCCI

  • LCCI to CBN: lift forex restriction on 41 items

    LCCI to CBN: lift forex restriction on 41 items

    The Lagos Chamber of Commerce and Industry (LCCI) has called on the Central Bank of Nigeria (CBN) to lift the foreign exchange restrictions it placed on  41 items, saying the measure was no longer necessary, especially now that the regulator’s official forex window has been closed.

    LCCI’s Director-General, Muda Yusuf, in a statement yesterday, said the restrictions have caused considerable loss of jobs, insisting that “many more jobs are at risk as many firms run out of stock of their critical inputs for production,” adding,   “for the sake of economic policy coherence, any product that is not on the official import prohibition list of the Federal Government should have access to the autonomous foreign exchange market.”

    He agreed that import prohibition is a vital trade policy matter which should be undertaken in an integrated manner with inputs from other government agencies, including the Ministry of Finance, National Planning and the Nigeria Customs Service, among others, but cautioned however that  the consequences of import prohibition are far reaching and go beyond the narrow perspective of conservation of foreign exchange.

    “ The dimensions of  inter sectoral linkages, employment implications, Customs revenue implications, breaches of regional and other international trade treaties should be taken into account,” pointing out that  fiscal policy measures, such as taxation and import tariffs could be used, as and when necessary, to shape the behavior of economic operators as the policy thrust of government dictates.

    Yusuf stressed that the normalisation of the foreign exchange market is very crucial at this time to stem the current slide in the economy, factory closures, job loses, escalating prices, the waning Gross Domestic Product (GDP) growth and weakening investor’ confidence, stating that  the resultant impact is being felt across all levels of investments, including large companies, medium enterprises, small business, micro enterprises and the informal sector.

    The LCCI chief called for a proper understanding of the significance of the foreign exchange policy in the Nigerian economy, given the fact that the economy is not only highly import dependent, but also the fact that it is assuming greater integration with the global economy. In this regard, he called for transparency, and the need to ensure that there is adequate liquidity and stability in the administration of the foreign exchange market.

    ”It is very important to get it right!   A foreign exchange market characterised by transparency, liquidity and stability is imperative for rebuilding the economic growth momentum, boosting investor’  confidence, encouraging foreign exchange inflows and creating of jobs,” yusuf said.

    He urged the CBN “to urgently articulate a comprehensive framework for the autonomous market,” which he categorized as the “major forex market.”

    Yusuf called for a proper definition of the forex market, saying  foreign exchange from Diaspora remittances, Export Proceeds, Forex sales by foreign investors and multinational companies and Forex sales by Donor agencies and other NGOs,  should be allowed to be freely traded in the autonomous market.

    The LCCI critised what he termed, “excessive regulation and documentation,” saying that they should be avoided as in his opinion, they  “could undermine the development of a robust autonomous forex market.”

    He said: “ Current controls and regulations of forex inflows into the economy should be relaxed, without necessarily compromising the money laundering prevention measures of the relevant authorities.  Overregulation considerably hurts the economy.  It is paramount at this time articulate policies that would stimulate and unlock the huge potentials in diaspora remittances and other capital inflows into the economy.  Diaspora remittances to Nigeria were $21 billion in 2014, according to World Bank sources, “ he stated.

    The CBN had in July, 2015, restricted about 41 items, including vegetable oil, poultry products, cosmetics and plastic and rubber products among others from access to foreign exchange from its official window, arguing that the country has the capacity to produce those items locally.

  • MAN, LCCI express concern over new electricity tariff

    MAN, LCCI express concern over new electricity tariff

    The Organised Private Sector (OPS), including the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI), has expressed concerns over the new electricity tariff planned to begin on February 1 as supply has not improved and the pending court order.

    The President, Manufacturers Association of Nigeria (MAN), Dr Frank Jacobs, said the body is waiting to see whether the Nigerian Electricity Regulatory Commission (NERC) would disregard court order by going ahead to implement the new tariff in February. He said any attempt to implement the tariff would force some manufacturers out of business.

    He said: “It is not all the manufacturers that can set up a power plant. Many are using power from the grid for production together with generators. Do you know how much the 45 per cent increase in tariff translates to in naira in a week, month, quarterly, and yearly? It is a lot of money, and I do not think the sector can cope with this,” he added

    Jacobs said the situation is appalling, as many operators have been forced out of business in the last 10 years, due to inadequate power supply.

    Director-General, Lagos LCCI, Mr. Muda Yusuf, said the new tariff would worsen the condition of the operators of the OPS in the country, if urgent measures are not taken to address problems bedevilling the power sector.

    He said despite the removal of fixed charges in December, last year, by the commission, consumers are still groaning under huge cost of accessing electricity for production activities.

    Also some corporate and individual consumers are not oblivious of the fact that they will face difficulties meeting their energy obligations as from February this year. Already, consumers are groaning over what they described as ‘making frivolous payment’ in form of bills to the power distribution companies (DISCOs) since they are unable to access power regularly.

    Some consumers, who spoke to The Nation, expressed concerns over the new tariff, that have been increased by 45 per cent, by the commission, to reflect the cost of producing electricity in the country.

    A lawyer,  Mrs. Ponle Oluwarotimi, said consumers are heading for a more challenging period, going by the  decision of NERC to implement the new tariff, albeit, disregarding the order of the House of Representatives stopping NERC from introducing and implementing its tariff.

    She said the country is experiencing poor power supply, coupled with the fact that the economy is bad. “For the Commission to justify the 45 per cent increase in tariff, there must be an improved power supply in Nigeria. Given the fact that the sector is in a dire strait, with no hope of improving soon, consumers must be ready to pay huge bills, while at the same time, experience poor power supply,’’ she said.

    She said the situation is unhealthy for the economy that is struggling to grow.

  • Govt’s economic direction now clearer, says LCCI

    Govt’s economic direction now clearer, says LCCI

    The Federal Government’s direction has become clearer, following its release of the Medium Term Expenditure Formework (MTEF) and the Fuiscal Strategy Paper (FSP), Lagos Chamber of Commerce and Industry (LCCI) Director-General Mr. Muda Yusuf has said.

    Speaking with The Nation, Yusuf said with the release of the MTEF and the FSP, business operators now have clearer indications of the government’s disposition towards the petroleum Industry Bill (PIB) and other reforms in the oil and gas sector.

    He said the 2016 budget has also given some insights into the economic plans of the administration. “Clearly, the situation with regards to the policy direction of the government is much better today than it was few months ago,” Yusuf said.

    He, however, said LCCI still expects further information and insights into the policy framework with regards to public private partnership and the scope for private sector investment in infrastructure provision. “This is very important in the light of the serious revenue constraints that the government is faced with,” he noted.

    Meanwhile, the LCCI chief has described the scrapping of the fixed electricity charge by the Federal Government through the National Electricity Regulatory Commission (NERC) as ‘laudable’. The fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money mostly on a monthly basis, irrespective of whether electricity is consumed during the billing period or not.

    But NERC Chief Executive Officer (CEO), Dr. Sam Amadi, while announcing new electricity tariffs in the country recently, said electricity consumers would no longer pay the contentious and vexatious fixed charge included in the monthly electricity bills issued by the 11 DISCOs in the country. He said consumers would now only pay for what they consume monthly (pay-as-you-consume).

    But Yusuf, who lauded the removal of the fixed charge, said the provision of meters to consumers should be accelerated to put an end to the phenomenon of estimated billing. He said the NERC and the Minister of Power, Mr. Babatunde Raji Fashola (SAN)  had argued that the tariff review was a major plank of the Power Sector Reform and is critical to the delivery of power.

    He said the purpose, according to them, is to make electricity tariff cost -reflective to make investments in the sector attractive and sustainable. “It is difficult to fault this position, especially in the light of the clamour by the citizenry for a private sector driven power sector.  In any event, it will still be cheaper (even with the review) than individual firms or households providing electricity through generators powered by diesel, petrol generators or LPFO,” Yusuf said.

    He was, however, quick to warn that “electricity consumers should not be made to pay for inefficiency or corruption costs.  It is important to evaluate the elements of the current costs especially the integrity of procurement processes and other operational expenditure under the current dispensation. The risk of bloated costs exists and should be addressed.”

    The NERC explained that the tariff review was the result of a transparent, rigorous and credible rate review process that will lead to greater reliability in the provision of electricity. The commission added that with the review, “more people will progressively have access to the grid, more meters will be deployed and the need for self generation would be gradually reduced.”

    However, the LCCI chief pointed out that pricing is only one component (although fundamental) in the power delivery chain. “There are other issues such as availability of gas, security of gas infrastructures; adequacy of investment in gas infrastructure; security and adequacy of the transmission lines; huge indebtedness by the Ministries, Departments and Agencies (MDAs) to electricity distribution companies (DISCOs) and the general framework to mitigate the risk of investment in the sector. All these need to be sorted out in order to inspire investors’’ confidence,” he added.

    On the controversial Central Bank of Nigeria (CBN) Foreign Exchange (forex) policy, the LCCI chief said it is notable that President Muhammadu Buhari during his budget address to the National Assembly assured the nation that the forex policy will be reviewed.

    “One of the challenges of the investment environment is the foreign exchange policy especially the liquidity problem in the foreign exchange market,” he pointed out, adding that “Investors have issues with the exchange controls, the restrictions of importers of 41 items from access to the foreign exchange market, the restrictions on export proceeds, restrictions on the use of debit naira card abroad and above all, the liquidity crisis that has been created in the foreign exchange market.”

  • 2016 economic prospect not good, says LCCI

    2016 economic prospect not good, says LCCI

    Nigeria’s foremost private sector business association, the Lagos Chamber of Commerce and Industry (LCCI), has painted an admixture of a cautious optimism for the nation’s economy on the one hand, and a bleak outlook on the other for next year.

    While it posits that the N300billion projected funding of the Small and Medium Scale Enterprises (MSMEs) by the commercial banks would boost lending to the sector, grow agriculture and create employment as well as increase the chances of the countries foreign exchange earnings in non oil export, its thoughts on declining global oil prices and its consequence on government’s revenue, as well as firms honouring contractual obligations to their financiers, were bleak, suggesting that the economy may yet tread a turbulent trajectory in 2016.

    LCCI’s Director-General, Muda Yusuf, in a statement yesterday,  entitled,  Economic and Business Review in 2015 and Perspective for 2016, said: “The targeted N300 billion by the Nigerian banks to boost lending to Small and Medium Scale Enterprises (SMEs) and the agriculture sector in 2016 will boost SMEs development and employment and thus increase,” but nonetheless observed that the declining international spot oil price and its fallout will create unease for the economy in the coming year.

    As he put it: “With the declining trend of global oil price and its attendant impact on government revenue and foreign reserves, general business outlook will remain tense. Implications on cost of and access to credit will be undesirable. Businesses, especially those with high foreign exchange exposure, will continue to face challenges of meeting foreign obligations to suppliers and partners,” stressing that “this will also impact contractual trust and integrity.”

    He had no kind words for the Insurance sector either. In his words: “The insurance industry will remain largely underpenetrated with insurance density at about 0.225 per cent. Therefore, significant change in this industry with respect to growth and penetration remains bleak even as the sector is still highly fragmented,” he stated, pointing out that the declining Gross Domestic Product (GDP)  is also expected to strain, to a large extend, the performance of this industry.

    On the much trumpeted subsidy removal, Yusuf, argued that subsidy arrears payment and end of subsidy regime, would likely result in improved market efficiency and profitability as downstream sector players explore pricing dynamics to boost investment. The expected deregulation in the downstream sub-sector, in his view, “will be a game changer”.

    He warned of the likelihood of default across the business spectrum in 2016 due to cash flow hic-ups. “Risk of default in financial obligations in both public and private sectors will be high as macro-economic conditions and cash flow, remain tight,” Yusuf said.

    The LCCI chief expressed optimism that in 2016, GDP growth is expected to rebound ( as against its decline in the 3rd quarter of 2015, when it dropped to 2.84 per cent ), to about 3.5 per cent, if, as he put it, “the right mix of fiscal and monetary policies are put in place to stimulate the economy and attract domestic and foreign investments.” He said while the recovery is expected to be driven by increase in government expenditure, the growth in oil sector may be constrained still by low price and investment drive.

    He said the exchange rate volatility is expected to persist fuelling high inflation of about 10-11 per cent, stating however that correction towards Real Effective Exchange Rate (REER) in the form of exchange rate adjustment is likely in the first quarter of  2016, suggesting that this will reduce the pressure on external reserves.

    Yusuf drew attention to the deplorable state of access roads to the Lagos Ports, saying the subsisting situation has resulted in negative contribution to business as it has lead to congestion at the ports resulting from the delay in the evacuation of cargo, high demurrage paid by importers to Terminal Operators and Shipping Companies as a result of delays [which were not their own making] in the clearance and evacuation of cargo in the ports and high cost of transportation for evacuating cargo, among other challenges,

    He urged the Federal Government to fix these roads as a matter of  urgency, in addition to the completion of the Trailer Park within the vicinity of  the Tincan Island Port.

  • LCCI praises Buhari for raising 2016 budget capital vote

    LCCI praises Buhari for raising 2016 budget capital vote

    The Lagos Chamber of Commerce & Industry (LCCI) has commended the President Muhammed Buhari  administration for raising the capital expenditure to 30 per cent from 15 per cent in this year’s budget.

    In a statement by its President, Dr. Mrs. Nike Akande, LCC said most of the assumptions made in the 2016 draft budget reflected the realities and desired spending priorities for national development.

    She expressed hope that adequate provision would be made within the context of the capital provision for infrastructure towards addressing the huge infrastructure deficit.

    She noted that one of the effective means of achieving this is through Public Private Partnership (PPP) model. To facilitate private capital flow into infrastructure building, she advised government to develop attractive policy frameworks for PPPs.

    She said: “We also urge the fiscal authorities to review and monitor the quality of capital expenditure and ensure that funds are directed to the critical infrastructure needed to drive productivity.”

    TheLCCI president,however, warned on the draft budget benchmark for crude oil at $38 per barrel, maintaining that it looks very fragile given the continued and projected boost of supply side of oil in the international market and its potential impact on oil price.

    She, therefore, canvassed the reduction of the oil benchmark, adding that  the chamber’s members agreed with the government that greater emphasis would be placed on non-oil revenue through diversification driven by agriculture, solid mineral and service sectors.

    The quick win for government, according to Mrs. Akande, is to focus on policies and regulations that will attract private capital and encourage investment. She added that efficiency of tax administration is very vital to expand the current non-oil revenue base.

    The LCCI chief also noted that the exchange rate benchmark of N197 per dollar in the 2016 budget appears too conservative and at variance with realities.

    She canvassed an exchange rate benchmark of N220 per dollar threshold in the 2016 budget.

    She criticised the growing budgetary provision for debt servicing, quoting the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) provision of N1.3 trillion for domestic debt service in 2016 mainly to service existing commitments.

    This figure, she argued, represents 72 per cent of the proposed capital expenditure. She canvassed an innovative strategy to reduce burden of debt service to the economy.

    “Noteworthy is the provision of zero allocation for kerosene subsidy, which has been one of the biggest burden over the years. The reduction of Federal Government’s share of fuel subsidy to N63.29 billion compared to almost N1 trillion spent on subsidy in 2015 is also a welcome development. These will definitely free up resources to finance other priorities especially infrastructure,” she said.

    Mrs Akande reiterated the Chamber’s call for the deregulation of the petroleum downstream sector in order to reduce the pressure on government finances and the foreign exchange market. According to her, this will not only create savings for investment in priority sectors but also provide a great opportunity to attract more investment to the sector.

    LCCI praised the Executive on the passage of the revised Petroleum Industry Bill (PIB),, noting that the Bill  will unlock opportunities in the oil and gas industry as well as create an transparent operating environment in the sector.

  • LCCI chair pledges increased effectiveness

    Lagos Chamber of Commerce and Industry (LCCI) new helmsman Chief Nike Akande has pledged to ensure that the chamber retained its status as the leading private sector advocacy organisation in Nigeria, through increased effectiveness and synergy with necessary sectors of the economy.

    At her investiture in Lagos, during the week, she said the chamber would rededicate itself to promoting a conducive environment for private sector to operate hitch-free while realising the Nigerian vision.

    She said: “As I mount the saddle of leadership of the Chamber, effectiveness and positive impact on the quality of investment climate will be my watchword.

    “We would ensure our advocacy achieve the right level of effectiveness, which will be measured by the response of various tiers of government to our proposals on policy direction in the interest of the investors, whether domestic or foreign.”

    Congratulating her, the wife of President Muhammadu Buhari, Aisha, who was represented by former deputy governor, Lagos State, Mrs. Adejoke Adefulire, said her election came at an auspicious time when the chamber needed a visionary leader to drive its cause.

    “The present administration will be glad to collaborate with LCCI leadership in ensuring a conducive business environment for the economy to improve on policies and measures affecting business and the economy at large. The government remains committed to the implementation of the economic diversification, reforms as well as creating enabling environment for investors,” she said.

    Expressing confidence in the new leadership, Lagos State Governor Akinwunmi Ambode, represented by his deputy, Mrs Oluranti Adebule, said the chamber would rise to greater heights through its broad and unique experience on the Nigerian economy.

    “At a time when the nation and the world is facing economic challenges, we need our best brains to move us forward. Businesses have to reinvent themselves and collaborate with each other for us to remain a sustainable economy,” the governor said.

    NBCC immediate past president  Alhaji Remi Bello said he had confidence in the new president, noting that her tenure would bring a rich blend of public and private sector experiences to bear on the chamber.

    He said: “This investiture is unique in a number of ways as Chief (Mrs.) Akande is the second female president of the LCCI in its 127 years history and first former minister of the nation to be president. I formally congratulate her on the well-deserved election.”

  • LCCI elects Akande president

    LCCI elects Akande president

    The Lagos Chamber of Commerce and Industry (LCCI), has elected Dr. Nike Akande, CON its President. She would steer the ship of the foremost Chamber and take charge of its affairs for the next two years. Her election followed the expiration of Alhaji Remi Bello’s tenure.

    LCCI Director General, Mr. Muda Yusuf said Akande emerged as President after a duly conducted election at the Chamber’s 127th Annual General Meeting held on Thursday 3rd December, 2015 at the Commerce House, 1 Idowu Taylor Street, Victoria Island, Lagos.

  • LCCI seeks funding for SMEs

    LCCI seeks funding for SMEs

    President, Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello has urged the government, business organisations and other stakeholders to make funds available for Small Medium Enterprises (SMEs).

    He said when SMEs have access to cheap funds it will enable them to run their businesses.

    Alhaji Bello noted that SME is a sector that should be seriously encouraged as it is the building pillar for any economy.

    He noted that SME sector must be encouraged to grow by being empowered with knowledge and skills, saying when they grow, they will be able to take advantage and make rightful decisions from the skills they have acquired.

    He also called for the provision of an enabling environment for business in terms of infrastructure such as electricity and space to do the business.

    Alhaji Bello also said when SME’s are encouraged, it will give more room for locally made products in the country.

     

     

     

  • Spate of regulatory sanctions worries LCCI

    Spate of regulatory sanctions worries LCCI

    • Chamber calls for restraint 

    The Lagos Chamber of Commerce and Industry (LCCI) is worried over the spate of regulatory sanctions in recent times, saying the penalties are severe, arbitrary and disproportionate.

    In a document signed by its President, Mr. Remi Bello, and made available to The Nation, Bello said while the LCCI would not support impunity under whatever guise, it would desire that the activities of regulatory institutions are in consonance with best regulatory practice.

    He identified the recent sanctions of N1.4 trillion fine imposed on MTN by the Nigerian Communications Commission (NCC) because of non-registration of SIM cards; and N1 billion administrative charge imposed on Guinness by the National Agency for Food, Drug Administration and Control (NAFDAC).

    Others are the N4 billion penalty imposed by the Central Bank of Nigeria (CBN) on Skye Bank; penalty on FirstBank to the tune of  N1.9 billion and N2.9 billion imposed on UBA by the CBN.

    LCCI argued that “sanctions should be proportionate and corrective. It should not be of such magnitude as to impose a shock from which recovery by firms may either be difficult or impossible. There should also be a clear framework and guidelines for the imposition of sanctions or penalties.”

    Bello canvassed the defining of the limits of regulatory discretional powers. He said the chamber took this position to check the abuse of power by regulatory agencies to avoid high-handedness and intimidating disposition which would not augur well for an economy that needs to attract investment.

    “Already, the perception and ranking of Nigeria as an investment destination is unsatisfactory. For instance, Nigeria ranks 169 out of 189 countries profiled in the World Bank Ease of Doing Business Report for 2015.

    “It also has a ranking of 124 out of 140 countries profiled in the global competitiveness report of the World Economic Forum. The regulatory environment is a critical factor in this ranking performance of Nigeria”, Bello added.

  • LCCI gets corporate communications manager

    LCCI gets corporate communications manager

    The Lagos Chamber of Commerce and Industry (LCCI) has appointed  Segun Alabi its new Corporate Communications Manager.

    LCCI Director- General Mr. Muda Yusuf, in a statement last Monday, said Alabi is a talented corporate communications professional, who has gained diverse experiences in the Pay T.V, manufacturing, financial and real estate sectors.

    He said Alabi would  be an added value and a real asset to the Chamber. “As we continue to support, promote and represent the opinion of the business community, as well as contributing to the growth of our economy.”

    Before his appointment, Alabi served as Head of Corporate Affairs at Forthright Group of Companies, overseeing public relations and communications functions of the organisation. He has focused on media relations, image architecture, internal communication, perception management and social media management at various levels. He is also a consummate corporate communications professional, who possesses the qualities of a communication connoisseur, with a canny ability to manage and disseminate information to a competitive advantage.

    Upon starting, Alabi said: “I am excited about joining the LCCI during this crucial period of entrenching positive change in all facets of our economy. The task ahead is not only to make the image, but also to sustain the already made image of the chamber, as well as improving on it.”

    Alabi holds a Bachelor of Arts degree in English from the University of Ado-Ekiti, Nigeria and a Master’s degree in English from the University of Lagos, specialising in Language Use and Communication.