The Lagos Chamber of Commerce and Industry has said the growing decline in the non-oil sector productivity of the Nigeria economy makes it vulnerable to global shocks and weak in economic inclusion.
In a message to celebrate the nation’s 61st independence anniversary, the LCCI said manufacturing could not thrive with high cost of production and cheaper imports.
According to a statement signed by the Director-General, LCCI, Dr Chinyere Almona, the chamber said there were challenges with the escalating cost of governance, fiscal leakages, and revenue optimisation issues.
It said, “There is an urgent need to address the weak government revenue base, rising and unsustainable debt profile, over-dependence on oil revenue, exposure to foreign shocks through weak forex supply, double-digit inflation.
“We commend the political will of this administration in taking the bold step on the passage of the Petroleum Industry Act 2021.
“The quality of the business environment remains a source of concern to investors, especially in the real sector.
“Weak infrastructure, policy environment, and institutions had adverse effects on the efficiency, productivity, and competitiveness of many enterprises in the economy.
The statement added that manufacturers had to worry about the high energy costs and high-interest rates put at 20 per cent and above.
Almona said, “Most SMEs are yet to recover from the impact of the COVID-19 pandemic that struck last year.
“It is impossible to have a vibrant manufacturing sector in the face of cheap imports into the country, and high production and operating cost in the domestic economy.
“Some of these imports are landing at 50 per cent of the cost of products produced locally. The way forward is to address the fundamental constraints to manufacturing competitiveness in the Nigerian economy.”
She added that the nation needed to seek innovative ways to fund its infrastructure as it could not continue to depend on debt financing.