Following the recent extension of the border closure till 31st January, 2020 by the Nigerian government, the Lagos Chambers of Commerce and Industry (LCCI) has said that the effect of the border closure is more pronounced in the south western part of the country being the financial and commercial hub of the country and the sub-region.
The Director General of LCCI, Mr. Muda Yusuf who made this observation in Lagos recently said that although the Chamber appreciated the concern of government as it affects economic sabotage which informed the closure of the borders in the first place, the demands of sacrifice imposed on business and the citizens by the border closure was disproportionate and becoming unbearable.
Yusuf noted that the continued closure had some unintended consequences some of which are; complete shutdown of cross border trade (imports and exports) between Nigeria business and their counterparts in the West Africa sub-region.
“This has grave consequences for investments and jobs. Many industries have invested in products registered under the ECOWAS Trade Liberalization Scheme (ETLS). These are investors whose business models were anchored on market opportunities in the ECOWAS. These investments have been completely disrupted and dislocated.
“Majority of the victims of the border closure are small businesses, most of them in the informal sector. Their means of livelihood has been put in great jeopardy. This class of traders does not have the capacity to move their products by sea because of the modest scale of their operations.
“Supply chain of some business has been completely disrupted.
“Maritime sector investors have been denied opportunities offered by transit cargo destined for landlocked countries which normally comes through the Nigerian ports.
“The closure has triggered an unprecedented hike in prices with a devastating impact on the poor. This implies further aggravation of the poverty situation in the country”, he said.
He further posited that Nigeria needed to fix some fundamental governance shortcomings as part of a sustainable solution.
The Director General identified some of the fundamental governance shortcomings which needed to be fixed to include; institutions for effective border management and policing, review of Nigeria’s import tariff policies for better compliance as current tariffs and charges are prohibitive, review of the nation’s foreign exchange policies to discount inherent subsidieseven as he pointed out that the exchange rate should reflect the key economic fundamentals.
He also said, “We need to fix our infrastructures in order to build an economy that is efficient, productive and competitive. Current infrastructure financing is grossly inadequate to make the economy competitive. High production cost remains a fundamental problem for the economy.
“We need to fix our seaports to reduce cargo diversion. Clearing cargo at the Nigerian ports is one of the most expensive and cumbersome in the world.
“We need to urgently reform the oil and gas sector to free resources for infrastructure development and promote investment in the sector.”
Yusuf however called on the recently inaugurated Economic Advisory Council to live up to the high expectations of Nigerians by offering sustainable and coherent policy options to government to save the economy and investors from further disruptions and dislocations arising from inappropriate policy choices.
Photo: LCCI Director General, Muda Yusuf.
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