Lagos Chamber of Commerce and Industry (LCCI) is projecting an increase in loan-to-deposit ratio (LDR) from 65 percent to around 70 percent by 2020.
The chamber also predicts that the introduction of the visa-on-arrival policy will open the country to more opportunities and investors, but warned that it may worsen insecurity in the country.
In a statement signed by Muda Yusuf, director-general, LCCI, the chamber says increased LDR will help key sectors such as the manufacturing to improve its performance.
The Central Bank of Nigeria (CBN) recently raised LDR from 60 percent to 65 percent to boost lending to the real sector.
The LCCI commends the policy, but warns that it may worsen non-performing loans as the domestic economic landscape is still fragile and borrowers may find it difficult to fulfil obligations.
On visa-on-arrival policy, the chamber says its introduction will facilitate continental economic integration between Nigeria and other African nations at a time the continent is bracing up for the African Continental Free Trade Area (AfCFTA) agreement scheduled to start on July 1, 2020.
“On the flip side, the policy could exacerbate insecurity in Nigeria as expressed by the National Assembly if steps are not taken before implementation,” the chamber warns.
The visa-on-arrival policy, adopted recently by the Federal Government, permits Africans to come into Nigeria without a visa. However, they will be required to apply when they arrive.
“We hope the necessary government agencies would take steps required so as not to expose the country to security risks, and properly scrutinise those that would be coming into the country through the visa-on-arrival facility,” the chamber admonishes.
“The potential for growth of the Nigerian economy is immense. But we should not remain a nation of potential. In order to unlock these huge potentials, we need to put in place appropriate policies, regulations and institutions,” it further says.
In its recent report, the African Development Bank Group (AfDBG) ranked Nigeria the 30th position in visa openness in Africa. The report also says that most of the countries that made the greatest progress on visa openness since 2016 are strong adopters of technology.
The LCCI recommends adoption of visa-free policy for nationals of selected advanced economies to facilitate the inflow of investment from these countries to Nigeria.
“This is a policy adopted by even the advanced economies to attract investors,” the chamber argues.
It adds that investment is critical to the growth of any economy, stressing that this is especially for an economy that is struggling with revenue and other resources.
“Growth in private investment will boost employment, impact on revenue, promote social stability and enhance the welfare of citizens,” the chamber says.
“Even more important is the promotion of economic inclusion through a right mix of fiscal, monetary and investment policies,” it further says.
The chamber stresses that it is fundamental to have an enabling environment for investors [domestic and foreign] to create wealth and jobs for the country.
