The Lagos Chamber of Commerce and Industry (LCCI) has called on government at all levels to deepen investor confidence in the economy which was weakened by aggravated fiscal and external risks caused by pandemic-related disruptions.
The chamber emphasised that this could be achieved if policymakers pursue an investment-led growth strategy that is private capital-driven given its multiplier effect on the economy.
Its President, Toki Mabogunje, made the call at a briefing on the state of the economy, where she noted that as the fiscal and monetary authorities were putting in place measures to drive recovery, it was imperative to consolidate these efforts by implementing key structural reforms including recalibrating the country’s foreign exchange management framework and ensuring consistency in the policy environment to bolster investor confidence.
While appreciating the Central Bank of Nigeria (CBN) efforts in preserving the scarce foreign exchange resources at a time the country is faced with relatively lower oil price and production, the chamber opined that disproportionate reliance on demand management strategies was not a sustainable solution to the recurring foreign exchange crisis.
Mabogunje therefore urged the CBN to de-emphasise demand management policies and intensify efforts in improving the supply side of the foreign exchange market.
“We welcome the CBN’s recent policy stating that beneficiaries of Diaspora Remittances should be paid in foreign exchange.
“The policy is a step in the right direction in resolving the liquidity issue in the currency market by ensuring availability of foreign exchange, especially at the retail segment. This should be replicated for other sources of inflows such as export proceeds, Foreign Direct Investment [FDIs], and Foreign Portfolio Investments [FPIs].
“Robust remittance inflow is expected to moderate FX pressure and narrow the wide parallel market premium as economic agents would have access to a harmonized rate.
“A unified FX framework is necessary to boost investor confidence.”