By Merit Ibe
The Lagos Chamber of Commerce and Industry (LCCI) has said that the county’s actual output performance was still below its potential output level as recorded in the pre-COVID-19 era.
With this, the chamber envisaged that to achieve key development outcomes such as job creation and poverty reduction will remain elusive in the light of fragile recovery, which reinforces the need for policymakers to pursue critical reforms to bolster confidence in the economy, accelerate post-pandemic recovery and alleviate poverty.
Speaking on the state of the nation, President of the chamber, Toki Mabogunje, also decried the worsening security situation, noting that banditry, abduction, herders-farmers conflict, vandalism, and insurgency have become recurring incidences.
Mabogunje lamented the impact of the crisis on the economy which remains profound and multi-dimensional, as it has crippled lots of private and public investments across the nation.
“Many lives have been lost, households have lost their means of livelihood and many farmlands across the country have been destroyed with a consequent impact on food production and security.”
She said the situation, which has projected the economy as an unsafe destination for private and foreign investments, if unaddressed, could thwart government’s efforts in attracting foreign capital into the economy.
“We note that investor confidence in the economy had been weak before the COVID-19 pandemic, and many investors still see Nigeria as a risky environment despite stronger oil prices and exit from recession. Confidence may not be restored in the near term if there is no significant improvement in the security environment. The situation has also impacted fiscal position by making government incur additional expenditure as contained in the supplementary budget, mainly to fund security operations. This could worsen the 2021 fiscal deficit in light of low revenue mobilisation.”
The chamber opined that decentralising the security ecosystem by enabling state and local governments to take key security-related decisions is an option to consider.
> “ It is also important to ensure a concrete and sustainable means of tackling the challenge of youth unemployment by designing programs and policies that would bolster employment opportunities for the youths in the country.”
> Mabogunje further explained that the improvement in recovery as the economy grew by 5.01% in real terms in the second quarter of 2021 compared to 0.51% reported in the preceding quarter reflects a stronger performance but still gradual recovery from the 2020 recession.
> She added that sectoral performances mostly recorded growth as 14 sectors reported expansion while 3 sectors contracted. “Growth was driven by the non-oil sector, which expanded by 6.74% in the quarter under review. During the quarter, the sector was driven mainly by growth in Trade 22.49%, Telecommunication 5.90%, Road Transport 92.38%, Electricity 78.16%, Crop Production 1.38% and Food, Beverage & Tobacco 4.87%. These records reflect the easing of supply chain disruptions and increasing business and economic activities across the country relative to the same period a year earlier.”