By Adedapo Adesanya
The Lagos Chamber of Commerce and Industry (LCCI) has sought government intervention in the manufacturing sector as part of efforts to staunch projected headwinds in 2023.
In its New Year statement on the economy, signed by its Director-General, Mrs Chinyere Almona, the chamber called on the government to save manufacturing from decline by offering it financial support and improving the operating environment.
The body noted that despite the continued moves by the Central Bank of Nigeria (CBN) to hike interest rates, the adjustment alone would not tame the rising inflation.
This would only help if factors such as food supply disruptions, high energy costs, scarcity of forex, and the security challenges around agricultural production locations, which triggered low production and high logistics cost, were addressed.
“The manufacturing sector suffered from headwinds such as scarcity of forex for import of inputs; weakened consumer demand due to weak purchasing power; high energy cost; logistical challenges; policy uncertainties; and harsh regulatory environment. With these factors not persisting into 2023, we may likely record growth in the sector away from the negative growth of -1.9 per cent as of Q3 of 2022. With lowering imports due to forex scarcity, local manufacturing could rev up in growth to meet the growing unmet local demand for hitherto imported finished products.
“However, this can only happen if we address issues like rising inflation; scarcity of forex; high energy cost; high-interest rates; and logistics challenge due to insecurity in most parts of the country,” the statement read in part.
The chamber said if the incoming administration removes fuel subsidy, there would be some shocks to the economy in the short term with the possibility of adjusted pricing and demand in response to market forces in the long run.
The LCCI then urged the federal government to sustain its targeted interventions in selected critical sectors such as agriculture; manufacturing; export infrastructure; tackling insecurity, and freeing more money from subsidy payments.
“With the approved plan of the Federal Government to restructure its Ways and Means loans of N23 trillion, Nigeria’s total debt stood effectively at N67.7 trillion by the end of 2022. Clearly, we must watch the cost implications of our borrowing and spending,” the statement further stated.
