Nigeria’s economic growth rate dips by 182% – LCCI


Owing to uncertainties in the nation’s business climate, the economic growth rate in the last one year has further declined by 182 per cent, the Lagos Chamber of Commerce and Industry (LCCI), has said.
President of LCCI, Alhaji Remi Bello, stated this in Lagos on Thursday during the chamber’s Annual General Meeting, saying the last one year had been very difficult for private sector operators in the country and Nigeria’s economy in general.
According to him, sectors such as manufacturing and the services entered recession after recording declines over the last three quarters.
His words: “The year was challenging as difficulties in the business environment persisted, especially in relations to insecurity, infrastructural conditions, foreign exchange crisis, funding, inconsistency of policy and the quality of institutions.
“There was also the challenge of uncertainties and risks created by the political transition and the elections.”
Bello said that political and economic developments offered mixed extreme and interesting events, which shaped business and economic environment in the year.
Specifically, he revealed that the reports that emerged from the National Bureau of Statistics (NBS), that Nigeria’s real Gross Domestic (GDP) fell to 2.35 per cent in the second quarter of 2015, compared to 6.54 per cent in the same period last year, indicated that the country’s economy has been running in retrogression.
On the review of the 2015 activities, Bello said that business were largely slow for the better part of the year due to uncertainties created by delay in forming an economic team and appointing ministers to drive the change agenda.
For the Central Bank of Nigeria (CBN)’s Monetary Policy Committee (MPC), the LCCI boss said that the decision by the MPC to reduce monetary rates from 13.0 per cent to 11.0 per cent, as well as Cash Reserve Ratio from 25.0 per cent to 20. 0 per cent was primarily targeted at stimulating output growth and ease financial speculations induced by high arbitrage.
In addition, he stressed that it was also to motivate the non-oil sector, given the current economic realities as manifested in weak and fragile domestic macroeconomic environment, fall in price of oil at the international market, unrelenting inflationary pressure, and declining private and public expenditures.
He, however, pointed out that in spite of the interest rate reduction in the year under review, lending rate of commercial banks including fees and charges ranged between 22 per cent and 34 per cent depending on the customer profile, tenor and collateral quality.
He added that cost and access to fund remained a major challenge for businesses, especially Micro, Small, Medium and Enterprises (MSMEs).
On the exchange rate, the Chamber’s helmsman said that the naira exchange was largely volatile throughout the year. This posed various challenges to monetary and fiscal coordination in 2015. In order to contain the pressure, CBN adopted several measures such as the closure of Retail Dutch Auction (RDAS) window and restriction of cash payment into domiciliary accounts and ban on 41 items from accessing the interbank foreign exchange.
He said that the naira depreciated by about 30 per cent at official and interbank FX markets with wide gap between the interbank and parallel rates over the better part of the year.