The Lagos Chamber of Commerce and Industry has urged the Federal Government to sustain the momentum of the ease of doing business programme to reverse the declining trend in Gross Domestic Product Growth.
Muda Yusuf, Director-General of LCCI, made the recommendation on Sunday in Lagos.
Yusuf said doing that would reduce the cost of operations of investors in the economy.
The News Agency of Nigeria reports that the Second Quarter GDP Report released by the National Bureau of Statistics showed that GDP growth in Q2 declined to 1.5 per cent from 1.95 per cent Q1.
Yusuf said: “With a population growth rate of 3 per cent and GDP growth of 1.5 per cent, there is a reason to worry about the wider implications for poverty conditions in the country.”
Yusuf said the chamber was concerned about the decline in the performance of the real sector in the quarter under review, with performance of the agricultural sector dropping from 3 per cent growth in Q1 to 1.2 per cent in Q2.
He noted that the manufacturing sector also declined from 3.4 per cent in q1 to 0.7 per cent in Q2.
He said: “These declines were in spite of the interventions given to support the real sector by both monetary and fiscal authorities.
“The real sector is still grappling with enormous productivity challenges arising from the constraint of infrastructure, particularly power and logistics.”
Yusuf noted that there should be greater investment and policy focus on improving logistics and strengthening the power sector.
The LCCI boss said governments at all levels should redouble their efforts to improve infrastructure as the poor state of infrastructure nationwide was taking a toll on investment across all sectors.
Yusuf also recommended that the differentiated Cash Reserve Ratio window that the Central Bank of Nigeria planned to use to improve lending to the real sector should be extended to other sectors of the economy, including the service sector.
He said: “The service sector currently contributes 54.64 per cent of GDP and 44.67 per cent of total employment and these should shape economic policy conceptualisation and implementation.
“The sector is also largely driven by indigenous players and has valuable inclusive attributes.
“The service sector deserves more policy and institutional support to unlock its full potentials.”
According to him, a holistic approach should be used to solve the problem of the economy and it is imperative to ensure an investment friendly tax policy.
Yusuf said the regulatory environment for business should be aligned to the ease of doing business agenda of government and that the Apapa, Lagos State gridlock should be addressed urgently.
The LCCI boss said the fiscal policy measures of government should be subjected to rigorous scrutiny and sensitivity analysis in order to avoid backlash on the economy and the welfare of citizens.
He said: “There should be a good balance between the interests of the consumers and those of the investors.
“Some of the recent 2018 fiscal policy measures may have adverse implications for cost of operations in some sectors as well as negative welfare effects on the citizens.”
Yusuf called for a review of some import duty components to reduce the negative effect on some sectors, as well as the adverse implications on welfare of citizens.