• Thursday, July 18, 2024
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FG’s planned support for 75 businesses insufficient to boost growth – LCCI

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The Lagos Chamber of Commerce & Industry (LCCI), has said the Federal Government’s planned support for 75 manufacturing enterprises would not significantly impact the economy.
The chamber supports the move to invest in the manufacturing sector but it would be pertinent to consider more than 75 enterprises, according to a statement on Tuesday.
“However, we commend the effort to kick-start sustainable economic growth and improve productivity,” it said.
It added that if the plan is rigorously pursued, economic growth through the real sector of the economy would be achieved and could revive Nigeria’s sluggish industrialisation and expand the GDP.
During a national broadcast on Monday, President Bola Tinubu, said his administration will spend N75 billion for manufacturers between July 2023- March 2024.
“The objective is to fund 75 enterprises with great potential to kick-start a sustainable economic growth, accelerate structural transformation and improve productivity,” he added.
According to the president, each of the 75 manufacturing enterprises will be able to access one billion naira credit at nine percent per annum with maximum of 60 months repayment for long term loans and 12 months for working capital.
Michael Olawale-Cole, president of LCCI, said the government would need to closely monitor the banking sector in the provision of these loan facilities so that the eventual cost of funds is not above from other banking fees and charges.
“It may be judicious to stipulate that the total costs of funds is benchmarked to nine percent regardless of the charges and fees,” he added.
The high cost of petrol prices occasioned by the removal of subsidy and the devaluation of the naira is taking a toll on businesses in Africa’s biggest economy.
The latest Purchasing Managers’ Index (PMI) by Stanbic IBTC Bank show that business activity in Nigeria dropped to 51.7 in July 2023, the lowest in four months from 53.2 in the previous month.
“Steep price pressures acted to limit the pace of growth in the Nigerian private sector in July. Overall input costs rose at a pace unsurpassed in more than nine-and-a-half years of data collection, with selling prices up rapidly in response,” it said.
LCCI recommends the government to ensure smooth and promising implementation of the measures and regularly engage the citizens and the organized private sector to ensure accountability.
“There should be proper monitoring and evaluation of the implementation process to ensure benefits to the people,” the chamber said.