The Lagos Chamber of Commerce and Industry (LCCI), yesterday, urged the Central Bank of Nigeria (CBN), to increase its benchmark lending rate to 17% at its next Monetary Policy Committee (MPC) Meeting this month to check rising inflation and prevent capital flight.
In a statement titled: “The LCCI New Year Statement on the Economy 2023,” signed by LCCI Director-General, Dr Chinyere Almona, in Lagos on Monday, the Chamber noted that Nigeria’s economy recorded growth in the first three quarters in 2022, but at a slower rate from 3.54% in Q2 to 2.25% in Q3.
Almona said: “We expect to have a growth reported for the last quarter of 2022. The slowdown was driven by decline in aggregate demand in the face of inflation spikes, commodities’ supply chain disruption, high energy cost, and FOREX scarcity.
“In 2023, we expect to see growth in sectors like manufacturing, agriculture, transport, telecommunications, and trade.
“With Nigeria having the third largest subscriber base in Africa (after South Africa and Egypt), the telecoms sub-sector is expected to record growth above the 10.1% achieved in Q3 2022 driven by the growing deployment of Payment Service Banks (PSB) by the telcos, increase in subscribers using more telcos’ services, and the expected innovation coming with the launch of the 5G technology.
“The Government needs to be more sensitive to the regulation of the ICT sector to promote growth and support private sector operations.”
In 2023, we expect to see growth in sectors like manufacturing, agriculture, transport, telecommunications, and trade.
LCCI had earlier argued that rate hikes alone is not enough to curb inflation, as issues around real factors like food supply disruptions, high energy cost, scarcity of foreign exchange, and the security challenges in the agricultural production locations, which have fuelled low production and high logistics cost, need to be addressed to curb inflation.
The MPC rates peaked at 16.5% as of November 2022, while inflation rate rose to a new high of 21.47%.
Accordingly, LCCI insists that the country needs fiscal interventions to support strategic sectors like manufacturing, agriculture, transport logistics, and more allocation of foreign exchange to the productive sectors this year to cushion the effects on inflation.
It added that such interventions can come through targeted financing support to boost agricultural production, create jobs, and lower rising food inflation, which pushed headline inflation all through 2022.
Despite insecurity, poor road network to connect markets, high cost of farm inputs, and the flooding disaster caused by climate change, LCCI noted that the agriculture sector still recorded growth all through last year.
