Inflation, forex scarcity hitting businesses hard, says LCCI

Inflationary pressures and foreign exchange scarcity has significantly impacted the operating costs of businesses in Nigeria, the Lagos Chamber of Commerce and Industry has said.

The President, LCCI, Mrs Toki Mabogunje, said this on Thursday in Lagos at a roundtable on the ease of doing business.

“The quality of the investment climate is critical for productivity and competitiveness in an economy,” she said.

She noted the efforts by the Federal Government, through the Presidential Enabling Business Environment Council, towards eliminating constraints and bottlenecks to doing business in the country, as well as the implementation of some regulatory reforms.

Mabogunje said, “We commend the PEBEC Secretariat for this accomplishment. We appreciate that matters relating to the business environment is work in progress.

“Meanwhile, businesses and investors are still grappling with several structural, policy and regulatory challenges, which have kept the cost of doing business elevated.”

According to her, access to domestic and international financing opportunities, particularly among Small and Medium Enterprise, is still limited, despite the accommodative policy stance of the Central Bank of Nigeria.

She said just a few SMEs benefited from the low-interest rate regime in the previous year.

Mabogunje said, “Similarly, the combination of domestic inflationary pressure coupled with foreign exchange illiquidity has significantly impacted operating costs with serious implications for profitability.

“The huge deficit in public infrastructure, heightening insecurity, weakening purchasing power, inefficiencies at the ports are some of the other challenges faced by the business community.”

According to her, the ease of doing business is a key consideration for local and international investments, and evidence has shown a strong correlation between ease of doing business and private investment flows.

She said it would be almost impossible to attract and retain private investments without an enabling environment.

Mabogunje said, “No private enterprise can scale, expand, and create new job opportunities if the environment is not investment-friendly.

“A supportive and conducive environment is needed to accelerate the pace of economic recovery, regain investor confidence, attract fresh investments, and generate employment opportunities.”

The Special Adviser to the President on Ease of Doing Business, Dr Jumoke Oduwole, said PEBEC would continue to champion predictable and consistent policies towards positioning the government as a partner for business and investment, not as a competitor or inhibitor of economic growth.