The Lagos Chamber of Commerce and Industry (LCCI) has recommended a review of the foreign exchange management framework to expand the scope of the market mechanism in the determination of the exchange rate and the unification of the exchange rates be prioritised.
This, according to the Chamber, is imperative for expediting recovery and bolstering investor confidence.
The Director General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, made this known Friday, during the Chamber’s reaction on 2020 GDP report even as the Chamber predicted a positive growth outlook in 2021.
Yusuf stressed that clarity in government’s policy direction was critical in deepening investor confidence. “Mobilizing efforts in making the business environment more conducive for MSMEs and large corporates by addressing structural bottlenecks and regulatory constraints contributing to high cost of doing business. Prioritizing public spending to support critical capital development expenditures in road, railways, power, health, education, to mention but few.
“Intensifying diversification efforts through efficient utilization of excess crude oil proceeds to develop the non-oil sector. Privatize idle public assets to help the economy unlock liquidity needed for strong economic growth and improved revenue mobilization”, he stressed.
“Deepening deregulation efforts in the downstream oil industry by providing industry players with FX at a competitive rate to import petrol, ensuring sustainable PMS pricing model, the expeditious passage of the Petroleum Industry Bill to ensure efficient transparency in the utilization of petroleum resources; promote healthy competition and drive private investment in the oil & gas sector”, he said.
He also noted that the current downturn was expected to be short-lived. “There are indications that recovery might be faster than expected however the pace of recovery is expected to be subdued within the region of one and two percent. Projections by World Bank and IMF put Nigeria’s annual average growth for year 2021 at 1.1 percent and 1.5 percent, respectively.
“The country’s recovery prospects in the year 2021 will be dependent on five key factors including effective management of the pandemic locally and globally, widespread vaccine rollout, direction of global oil market, fiscal and monetary policy direction, and ease of doing business reforms
“Accelerating the pace of economic recovery requires fiscal and monetary authorities to be well coordinated to promote growth-enhancing and confidence-building policies that would encourage more private capital inflows into the economy. An investment-led growth strategy is critical for inclusive and sustainable economic growth. Strong commitment to key reforms will not only boost output recovery but will also put the nation on a path of macroeconomic stability”, he maintained.