Tag: LCCI

The Industrial Group, in conjunction with the Export and Financial Group of the Lagos Chamber of Commerce and Industry (LCCI) has called on the government to always engage with players in the various sectors of the economy in formulating policies that will support the country’s industrialisation drive.

Speaking at the inaugural industrial symposium of the LCCI held in Lagos, recently, with the theme ‘Industries as the Catalyst for Growth and Economic Development,’ the Group stated that this will lead to  robust policies,  transparency, and inclusiveness that will foster the growth of businesses and positively impact the nation’s economy.

The Chairman of the Industr ial Group of LCCI, Mr. Ade Adefeko, said the economy is in a state of comatose, and there is a need to revive it, hence the symposium to deliberate on ideas that will enable businesses to thrive.

He called on the government to foster a favourable regulatory framework that will boost business operations.

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The Director of Corporate Affairs and Communication at JTI Nigeria, Mr. Vivian Ikem, who was one of the Panelists, said regulations play a key role in improving the ease of doing business. He, however, noted that regulations must be inclusive, fair and balanced to support business growth.

Ikem stated that the non-involvement or engagement of relevant stakeholders in policy formulation and the inconsistency of some regulations and their enforcement have been a major challenge facing businesses.

Earlier in his welcome address, President and Chairman of Council, LCCI, Mr. Gabriel Idahosa, averred that the symposium is one of the LCCI’s new steps to strengthen business operations and to catch up with other emerging economies.

Idahosa also listed the lack of access to low-credit loans from the country’s financial institutions, regulatory uncertainties, foreign exchange challenges, and infrastructural deficit as some of the factors militating against industries’ growth, stating that there is an urgent need for solutions through collaboration. LCCI seeks inclusive policy to stimulate growth

The Lagos Chamber of Commerce and Industry (LCCI) yesterday called for harmonious and sustained implementation of ongoing policy reforms as a way to stem rising prices of goods and services.

President, Lagos Chamber of Commerce and Industry (LCCI), Mr Gabriel Idahosa, who spoke at the LCCI’s  quarterly state-of-the-economy news conference yesterday  in Lagos, said government must focused on boosting food production through ongoing policy reforms, targeted fiscal interventions, and better management of Nigeria’s floating exchange rate regime.

“If government harmonises its fiscal and monetary instruments to tackle cost of agricultural production, enhance food processing, and sustain the fight against insecurity, inflationary pressures may soon begin to abate,” Idahosa said.

He urged government to also be more vigorous regarding ongoing interventions such as removing some taxes, transition to Compressed Natural Gas mobility, crude for naira scheme, and suspension of some import duties.

According to him, increasing supply of foreign exchange (forex) will also help to strengthen the naira, especially if transactions in the forex market are transparent enough to reduce speculative activities. 

 He noted that with the naira gaining progressively in the past weeks, government earning more forex to boost the supply of dollars, and the intensive focus on targeted interventions, the country should begin to see an easing in inflationary pressures.

He however cautioned that increase in interest rate alone would not curb inflation without first resolving the challenges in the real sector, noting that the real sector had demonstrated the capacity to create more jobs, manufacture products for consumption and export, and form the economy’s industrial base.

According to him, while high interest rates attracted foreign portfolio investments, and local investors to treasury bills and bonds, the development was drying up funds away from the private sector to government treasuries.

He said the private sector, which served as the engine of growth and employment generation in Nigeria, was currently plagued with increased borrowing costs and reduced investment incentives amongst others.

Idahosa urged the government to give more attention to the manufacturing sector by addressing factors contributing to the high cost of production, including high inflation, high interest rates, multiple taxation, and volatile exchange rates.

He urged the government to adopt prudent fiscal policy measures and create a business environment that promotes non-oil export growth and competitiveness. This is projected to boost export earnings, diversify foreign exchange earnings, raise domestic revenue, increase business productivity, and improve citizen welfare.

Read Also: LCCI laments stifling business environment, demands concessions

He urged the government to continue making credit available to micro, small and medium enterprises (MSMEs) to support their operations and production lines, calling for concessionary rates, lower than CBN prevailing MPR, for the MSMEs.

According to him, the high lending rates make it challenging for businesses to access credit, especially for SMEs that are the backbone of the economy.

He noted that the  increase in production costs could lead to higher prices for goods and services, potentially affecting the competitiveness of Nigerian products in Africa and global markets, respectively.

He called on the government to focus on improving real sector productivity with massive investment in infrastructure, reviving government-owned oil refineries, and reducing the bottlenecks in fuel supply.

On security, he canvassed the need for government to prioritise addressing the insecurity bedeviling the country and strategically focusing on increasing national agricultural productivity. 

He specifically recommended that the government incentivize sub-national governments, particularly at the grassroots levels, to increase funding and investment in the agriculture sector to boost productivity.

“The Central Bank of Nigeria (CBN) should incentivize banks to allocate more credit to agriculture and agro-processing to improve the sector’s private investment and productivity growth. We commend Prof. Attairu Jega’s Presidential Livestock Development Committee on submitting its report and urge the government to implement key policies and recommendations that will increase livestock and aquaculture productivity in the country,” Idahosa said.

The Lagos Chamber of Commerce and Industry (LCCI) has decried the stragulating business environment in the country, a development, it insists is a disincentive to businesses.

The body spoke through its President Mr. Gabriel Idahosa at the weekend.

In a statement issued on behalf of the chamber tagged, “LCCI Statement on New Petrol Pump Price by NNPC Limited,” it expressed concerns that businesses are at a crossroads with policy directions and needed a positive national orientation to navigate the stormy waters they have found themselves today.

The chamber therefore tasked the federal government to come plain to Nigerians and businesses on the direction of their policies and what near-term achievements are possible in order to build some level of certainty to support business planning and decisions.

According to Idahosa: “With the CBN’s monetary policy rate at 27.25 percent (with allowance up to about 34 per cent), inflation elevated at 32.15 percent (August 2024), an exchange rate above N1620 per  Dollar, and an unemployment rate at 5.3 per cent, we run a business environment that is too tense for businesses to thrive. Since the inception of this administration, petrol prices have risen by about 430 percent to date.

“These indicators may worsen in the coming months due to a thriving speculative environment, harsh regulatory ecosystem, unguided controversies, persistent insecurity challenges, and weakening purchasing power that restrain demand for goods and services.”

Businesses, he stressed, are trying “to understand that the recent fuel price hikes could be the government’s intention to fully deregulate the oil and gas sector and implement a complete fuel subsidy removal policy.

“However, the dynamics and controversies around these steps create most of the distortions we experience in the business environment, making businesses operate under dark clouds of uncertainties.

“It has become difficult to understand the plans and moves taken by the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation Limited, and the various oil and gas sector regulators in the face of recent happenings. The controversies surrounding the working relationship between NNPCL and the Dangote Refinery are equally confusing.”

He bemoaned that businesses have continued to suffer from increasing burdens of rising operating costs incurred on logistics, power supply, scarcity of forex for critical input, and inflated costs on third-party sourced services.

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Idahosa stated that addressing the challenges businesses are faced with would require a multi-pronged approach, involving social, political, and economic considerations.

He urged the government to come out clean on whether fuel subsidies have been removed entirely or partially, adding that the regulatory agencies in the oil and gas sector should let Nigerians know what quantity of fuel is consumed locally in Nigeria.

He said: “We should implement the Petroleum Industry Act (PIA) to support a fully deregulated oil and gas sector. This will reduce the uncertainties and irregularities in the sector, enhance the sanctity of contracts, and attract foreign investments.

“We have always recommended that saved subsidy funds should be invested in building infrastructure that can cushion the impact of a tightening economy.”

Idahosa recalled that in most of the recent LCCI’s press statements, the chamber has consistently recommended the need for fiscal stimulus and non-cash interventions to cushion the burdens unleashed through the tight monetary stance of the government in the past 18 months.

“In the situation we find ourselves, we urge the government to stay focused and more vigorous regarding the ongoing interventions like the removal of some taxes, the transition to Compressed Natural Gas (CNG) mobility, the Crude for Naira scheme, and the suspension of some import duties. The CNG mobility initiative must be supported with CNG refuelling stations nationwide and credit facilities to support quick conversion and usage,”Idahosa said.

He also recommended pegging import duties at an exchange rate of N1000 per Dollar to provide much-needed fiscal stimulus.

He argued that this would stabilise costs for manufacturers who rely on imports, boost productivity and enable long-term planning.

The Lagos Chamber of Commerce & Industry (LCCI) has recommended  the use of fiscal stimulus and non-cash interventions to cushion the burdens unleashed through  what it called the tight monetary stance of the  current administration  in the past 18 months.

Its Director-General, Dr Chinyere Almona, in a statement, acknowledged the significant step towards alleviating the burden on businesses and households by the removal of Value-Added Tax (VAT) on diesel and cooking gas.  She noted that this well-considered move will provide immediate relief, especially as these commodities are essential to daily life and economic activities.

 According to her, implementing the Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas production are significant fiscal incentives that can revitalize the nation’s oil and gas sector.

She said: “For too long, the high cost of diesel has weighed heavily on the manufacturing sector, logistics, and transportation, while cooking gas, a cleaner and healthier alternative for households, has been made less affordable by VAT impositions.”

This policy, she said will lower the operational costs for industries, reduce the overall cost of living for Nigerians, and increase home access to clean energy.

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She said the successful transition to CNG mobility requires all the possible incentives to speed up the deployment adding that the tax reliefs for deep offshore oil and gas production could boost oil and gas sector investments.

Almona said the business community is upbeat about the government’s efforts towards transitioning to Compressed Natural Gas (CNG) as an alternative fuel for mobility.

 In her recommendation on the transition, she stressed the need to ensure that the shift to CNG mobility is smooth, efficient, and impactful in reducing costs for the Nigerian people.

 To achieve the desired widespread adoption of CNG, she said it is critical to establish and expand the infrastructure for CNG refuelling stations across the country as access to refuelling points is limited, creating a barrier to adoption.

Dr. Almona said the success of CNG mobility depends heavily on public acceptance and understanding of its benefits.

 She called for a comprehensive awareness campaign to educate citizens and businesses on the cost advantages to individuals, cost savings for the government, and the positive environmental impact of CNG adoption.

Furthermore, she said the transition to CNG requires vehicle modifications, which can be cost- prohibitive for individuals and small businesses. She advised the government to consider creating incentives or subsidies for vehicle owners to convert their engines to run on CNG.

“The shift to CNG presents an opportunity for job creation in the energy and automotive sectors. We need programmes to equip existing mobility entrepreneurs like mechanics, road transport workers, and commercial bus drivers with the necessary skills for CNG-related jobs, from vehicle conversions to infrastructure maintenance and operation.

 “The Chamber looks forward to the full implementation of Naira payments for crude oil sales to the Dangote Refinery and other local refineries  this move will herald a significant milestone in Nigeria’s economic transformation,” she said.

She urged the government to sustain the political will to be consistent with the reforms in the oil and gas sector and implement the Petroleum Industry Act (PIA) fully.

“We will see the long-term gains of these reforms if they are implemented under a conducive regulatory environment.

“Removing VAT on diesel and cooking gas is a bold step towards reducing the cost of living for Nigerians, but it is only the beginning. As we look to the future, the transition to Compressed Natural Gas mobility offers an opportunity to make energy more affordable, reduce emissions, and create jobs,” she said.

The Lagos Chamber of Commerce and Industry (LCCI) has commended the recent step by the Federal Government in approving import duty waivers for 150 days on selected food items.

President, Lagos Chamber of Commerce and Industry (LCCI), Mr Gabriel Idahosa, who spoke at the chamber’s state-of-the-economy quarterly news conference yesterday in Lagos, said such emergency interventions are not out of place since they are meant to fill a gap that local production capacity cannot achieve in the short term.

He however urged 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.

“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,” Idahosa said.

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.

“We urge the CBN to be consistent with the FOREX market reforms until we see the desired impact on the rising inflation rate and burdening high interest rates.

“We recommend the CBN explore alternative policy measures that promote credit access, stimulate investment, and support entrepreneurship. This could include targeted interventions such as concessional lending facilities, loan guarantees, and interest rate subsidies tailored to the needs of SMEs and key sectors of the economy like agriculture, manufacturing, and power technology,” Idahosa said.

On power supply, Idahosa  urged  government to create the needed environment where local meter manufacturing can thrive to bridge the current gap in meter deployment. This will reduce the pressure on the foreign exchange market, create jobs, generate revenue for the government, and develop local expertise in meter manufacturing, he stated.

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He lamented that the private sector, which serves as the engine of growth and employment generation in Nigeria, is plagued with increased borrowing costs, reduced investment incentives, heightened uncertainties in our policy environment, and a pressured foreign exchange market.

He said the recent hikes in the Monetary Policy Rate (MPR) have directly translated into higher interest rates, making it more expensive for businesses to access credit for working capital, expansion, and sustainability.  He argued that though government high treasury bills and bond yields, attracts investments from local and foreign portfolio investors it is however, crowding out the private sector from accessing credit.

He lamented the slump in agriculture growth as captured in its quarterly reviews of the economy.

LCCI, in the report, regretted that first quarter 2024 GDP report showed that growth in agriculture, the nation’s largest single economic sector and employer, was very weak at 0.18 per cent compared to 2.10 per cent in the previous quarter.

This, he said, was a reflection of a marginal growth of 1.71 per cent in crop production and contributed over 91 percent of the total output in the sector while the livestock and fisheries sub-sectors recorded weak performance.

However, he said LCCI expects to see some improvement in these sub-sectors with the creation of the Ministry of Livestock Development by the Federal Government.

Idahosa said the growth in the first quarter was primarily driven by the non-oil sector, which recorded a growth of 2.80 percent and contributed 93.62 percent to the GDP. In particular, the fastest-growing sectors in the economy include solid minerals, finance & insurance, oil & gas, ICT, arts, entertainment & recreation, and transportation and storage. It is important to note that most sectors that recorded significant growth are small, except ICT he added.

The Lagos Chamber of Commerce and Industry (LCCI) has hailed the recent Executive Order introducing zero tariffs, excise duties, and Value-Added Tax (VAT) on imported pharmaceutical inputs.

This bold move, it said, aligns with the broader initiative to unlock the healthcare value chain, emphasising the revitalisation of local drug manufacturing.

Director General of LCCI , Dr Chinyere Almona in a statement said by significantly reducing production costs, this initiative will enhance the competitiveness of local manufacturers. She lamented that the recent exit of some pharmaceutical firms has made drug availability difficult, leading to higher costs of medications, arguing that this policy intervention has come at a good time.

Almona said the success of the implementation of the order will require close collaboration among the relevant Ministries, Departments, and Agencies (MDAs).

She advised that a harmonised implementation framework should be developed to ensure efficient execution. Agencies such as the Nigeria Customs Service, NAFDAC, SON, and FIRS, she advised, must create a smooth operational environment in order to eliminate bureaucratic delays and bottlenecks.

The LCCI boss acknowledged that eliminating taxes on crucial inputs paves the way for a revitalised local pharmaceutical industry and improved access to affordable healthcare products.

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She noted that countries like India and China have successfully implemented similar policies and have become major drug manufacturing hubs in their regions.

Nigeria’s new directive should align with these successful models to enhance local manufacturing capacity and reduce import dependency she stated.

She said: “In Nigeria, about 70 percent of the country’s pharmaceutical needs are met through imports. This heavy reliance on imports is primarily due to limited local production capacity and various challenges in the sector such as high production costs and regulatory hurdles. “If sustained, this policy can position Nigeria as a drug manufacturing hub for sub-Saharan Africa, leveraging the African Continental Free Trade Area (AfCFTA) to expand drug exports across the continent.”

The Lagos Chamber of Commerce & Industry (LCCI) has urged all parties to consider a wage that reflects a good balance of economic realities, affordability, and sustainability.

 In a statement, LCCI Director General, Dr Chinyere Almona said a situation where a particular wage is forced on government and businesses that may eventually lead to job losses, worsened poverty levels, with so much money chasing few goods should be avoided.

 She therefore, urged labor to be more flexible, reconsider the government’s offerings, and be concerned about how private businesses can afford to pay the set wage without considering shutting down operations or cutting jobs.

 She said: “Beyond the new minimum wage, the Chamber is more concerned about having a more productive economy with a robust infrastructural base supporting the economy.

We urge the government to consider implementing special non-cash interventions that will see businesses spend less on production, remove the import duties on food imports, and critical raw materials drastically reduce the import duty exchange rate on agricultural input and other imports that have multiplier effects on prices.

 The LCCI boss suggested the implementation of an aggressive metering programme on power supply, and more investment and regulation in the sector to boost power supply through more contractual discipline and gas supply guarantees, in addition to building infrastructure to support local production of essential medicines and more spending to upgrade public health facilities.

 “With the government’s commitment to providing these support systems to Nigerians, low-income earners will spend less on these expenditure heads and have a better living standard in the long run. “The labour unions should consider labour productivity supported by infrastructure rather than high wages with weak productivity. The government needs to spend more on providing the infrastructural base required for a productive workforce and a conducive business environment,’’ she said.

 Almona argued that the Federal Government’s proposals represent a significant increase aimed at improving the livelihood of workers across Nigeria.

  According to her, it is imperative to acknowledge the fiscal constraints and economic challenges various state governments face. Some governors under the Nigerian Governors’ Forum have already indicated their inability to meet the initially proposed higher minimum wage, citing budgetary limitations and the potential risk to essential public services.

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 “We urge all parties to consider a wage that is within the financial capacity of both federal and state governments that will help maintain economic stability, and prevent potential layoffs or cuts in essential services. It is also pertinent to adopt a wage that supports long-term economic sustainability,” she added.

 Also, she stated that all states can uniformly implement the new minimum wage by agreeing to a realistic and achievable wage, ensuring that workers nationwide benefit without significant delays or discrepancies. A wage demand exceeding state governments’ capacity could lead to industrial actions, strikes, and widespread disruptions, further hindering economic recovery and growth, she added.

 She advised the government to show more seriousness about cutting down the cost of governance and be committed to investing more in layers of infrastructure that support productivity and revenue generation. With more transparency in government spending, future negotiations will become easier as all parties are well aware of the realities.

 Dr Almona called on the government to commit to having the national minimum wage reviewed every five years. The government can show concern about personnel welfare by enhancing their allowances beyond the minimum wage, which is only calculated based on basic salaries, she noted.

 She also called on the labour unions to consider the interests of the broader business community in their demands and be more flexible in negotiations. Furthermore she called on all parties to work towards a new national minimum wage that promotes a fair deal to all concerned and for the overall interest of society.

The Lagos Chamber of Commerce and Industry (LCCI) yesterday sought clarification on the implementation of the directive by the Central Bank of Nigeria (CBN) to banks to implement section 44 of the Cybercrime Act 2024 which imposed a 0.5 per cent cyber security levy on Nigerians.

Its Director-General, Dr Chinyere Almona, in a statement, stated that by this directive, individuals and businesses will be burdened with an additional levy amidst unsettled performance crises with power supply after the recently reviewed electricity tariffs.

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She lamented that the recent upward review of the electricity tariff has not brought about a commensurate boost in power supply to justify the additional costs to individuals and businesses.

She urged the government to reconsider the implementation of this directive as its timing is wrong, and the justification is unclear. She advised the immediate withdrawal of the policy while more consultations with critical stakeholders is sought for professional advice.