To diversify the economy into the non-oil sector, there is need for the government to ensure lower interest for investors, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), has said.
NACCIMA President, Bassey Edem, said the interest rate charged investors by banks were too high to stimulate the much-needed growth to lift the economy out of the woods.
He spoke on the sideline of the review of the state of the economy and perspective on some trending socio-economic issues in Lagos.
He described the economic situation as harsh, adding that rising inflation has reduced the real income and the purchasing power of the average Nigerian.
He noted that inflation rate had risen from 9.55 per cent to 16.45 per cent since the beginning of the year, the highest point since 2005.
He said the Gross Domestic Product (GDP) growth rate in the first quarter of the year was minus 0.36 per cent compared with the growth rate in the fourth quarter of last year, which it said, was 2.11per cent while the GDP growth rate in the first quarter of last year was 3.96per cent.
Again, the same time, external reserves, decreased from $28.02 billion as at last February to $26.35 billion.
Monetary Policy Rate (MPR), according to him, has been increased to 14 per cent from 11 per cent by last February.
Edem added that the interest rate maintained a double digit figure, with the prime lending rate at 16.13 per cent and maximum lending rate of 26.73 per cent.
The NACCIMA chief said the real sector is suffering from rising costs of production in a state of near economic stagnation while facing the prospects of being the base by which the government hoped to obtain tax revenue to finance the economy.
“We note that the private sector, and by proxy, the majority of the populace which still exhibits confidence in the present administration are waiting anxiously to see the “Change” and dividends of democracy promised”.
He urged the government to continue its fight against insecurity and corruption, adding that it should also stimulate the economy.
He said NACCIMA would continue to partner the government in actualising its economic plan for the country to ensure economic transformation and social development of the nation.
“In the last six months, the outlook of the economy has been bleak. The rate of inflation has almost doubled, electricity generation has reduced by almost 50 per cent and the price of petroleum products has also doubled.
“Again, foreign exchange earnings have continued to drop significantly due to reduction in output caused primarily by the vandalism of infrastructure and low crude oil prices in the global market,” he noted.
Edem, who acknowledged the Federal Government for addressing these issues, said these have not translated into measurable positive indicators, adding that it has rather led to recession has become worrisome to private sector operators.
