The Lagos Chamber of Commerce and Industry (LCCI) has projected a GDP growth of three to four per cent and a surge in external reserve to $40 billion.
In a review of the 2017 economy, Muda Yusuf, director-general of the LCCI, says oil price could hang around $50 per barrel in the global market, while headline inflation could fall to 13 per cent.
Yusuf says for Nigeria to sustain its present rate of recovery and achieve the growth forecast, the country must embark on aggressive investment in infrastructure to boost productivity in the economy while reducing the multiplicity of exchange rates.
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He stresses the need for alignment of procurement policies at all levels of government to support domestic investment, calling for an investment-friendly tax policy, and policies that will protect domestic investors and enforce low-interest rate.
“Current reforms in such critical sectors as power, agriculture, solid minerals and oil and gas should be sustained. The executive orders signed in May this year should be fully enforced to improve the way Government does business and thereby improve the business environment,” Yusuf says.
He states that the situation with the manufacturing sector in 2017 was that of partial relief, especially concerning access to foreign exchange, adding that manufacturers reported an improvement in the liquidity of the foreign exchange market.
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“These enhanced their capacity to import raw materials and boosted capacity utilisation,” he points out.
He, however, recalls that manufacturers expressed concern concerning the high-interest rate that was between 25-30 per cent, the dearth of long-term funds, infrastructure situation concerning power, energy and logistics, as well as inflow of fake and sub-standard products.
Other challenges encountered by manufacturers last year, according to Yusuf, are weak patronage of locally produced goods, especially by government agencies and ministries; activities of the Federal Operations Unit (F.O.U) of the Nigeria Customs Service on their businesses, and indiscriminate valuation queries by the Nigeria Customs Service.
“The non-oil export sector was impacted positively by the depreciation in the naira exchange rate. This led to improved performance of the non-oil export sector, even in the face of recession and the fragile economic recovery,” he submits.
According to him, investors in the export sector expressed the following concerns in the areas of high production cost, which affected competitiveness; poor road network, especially Apapa roads; and the incursion of foreigners into the export of primary products and the consequent crowding out of domestic exporters.
“The Export Stimulation Fund promised by the CBN is yet to be made available to exporters. It is believed that the release of this fund will have a major impact on the export sector. The fund is N550billion,” he states.
Concerning the agricultural sector, Lawal states that “The agriculture sector benefitted from the inward-looking disposition which the recession created in the economy. In particular, the weak naira made imports more expensive and local products more competitive.”
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He, however, says that the sector grappled with several challenges which constrained its growth in 2017, including acute scarcity of parent stock for turkey which severely constrained the capacity of poultry owners to expand the production of a live turkey.
Other challenges faced by farmers included the high cost of vaccines and micronutrients for the production of fishmeal and other livestock feeds; and multiple government agencies, posing problems for importers of agricultural inputs at Lagos ports.
“Investors in the sector could not access foreign exchange at the official rate of N305 to the dollar,” he states.
Poor access to the ports and slow turn-around time, due to bad state of the roads and absence of a functional rail system had multifarious effects on the private sector, economy and the citizens, according to the chamber.
The LCCI says that ports users faced daunting challenges in 2017, leading to risk to the lives of citizens arising from containers falling off the trucks as a result of bad roads; congestion at the ports resulting from the delay in the evacuation of cargoes; high demurrage paid by importers to terminal operators and shipping companies as a result of a delay in the clearance and evacuation of cargo in the ports, and high cost of transportation for evacuating cargo because of the prolonged engagement of the trucks by importers arising from the delays.
“There were also delays in getting raw materials and other inputs from the ports to the factory premises in Lagos and other parts of the country,” he adds.
