The Lagos Chamber of Commerce and Industry (LCCI) has released its economic review of the President Muhammadu Buhari’s administration in the last four years.
Speaking in a statement in Lagos on Sunday, the Director-General of the Chamber, Mr. Muda Yusuf recalled that the regime came on board with an exceptionally high goodwill and with very high expectations from the citizens adding however, that the expectations weakened soon after as the regime was up to a slow start, from an economic management perspective.
Yusuf stated that the appointment of ministers took an unusually long time, about six months into the administration even as he observed that the key reforms, especially in respect of the petroleum industry and the infrastructure sectors were also slow in coming.
He noted that the decline in oil price and the activities of the militants in the Niger Delta regrettably compounded the economic challenges of the country in the first two years of the regime, culminating in a recession in 2016.
“However, the economy came out of recession soon after in 2017 following the recovery of oil price”, he said.
On the performance of the Gross Domestic Products (GDP) since 2015, the Director-General pointed out that the Nigeria’s economy grew by about 4 percent in the first quarter of 2015 saying that in the subsequent quarters, the economy witnessed a downward trend, reaching a low of -2.3% in 2016 Q3 which he said was largely as a result of sharp decline in oil price and oil production.
“The economy has since recovered from the recession and now on a growth path. The annual average growth from the first quarter of 2015 till date is 1.05%. The Latest GDP report indicates a growth of 2.0% in first quarter. The growth performance over the past four years has been fragile driven largely by the non-oil sector which is itself grappling with severe productivity issues resulting from the huge deficit in infrastructure. This underscores the need for urgent economic diversification anchored on improved productivity across sectors and structural reforms”, he added.
Yusuf, while stating that absence of an economic blueprint was a major concern in the early days of the administration, creating challenges of uncertainty, he however admitted that the Economic Recovery and Growth Plan [ERGP] launched in April 2017 by the President provided clearer economic policy direction of the administration, which according to him, enhanced the level of investors’ confidence and diminished uncertainties.
He continued, “The indications were that the government was committed to the implementation of the plan. The establishment of the Presidential Enabling Business Environment Council (PEBEC) gave a boost to investors’ confidence. The fact the body was chaired by the Vice President reflects the political will of the government to drive its activities. The Executive Orders provided further proof of government commitment to fostering an enabling environment for investors. However, there are concerns about the extent of compliance with the executive orders”.
Continuing, the LCCI DG disclosed that the forex policy of the Buhari administration was one of the major challenges faced by investors in the first two years of the administration noting that there were issues of uncertainty, volatility of exchange rate, round tripping which resulted from the huge differentials in the rates, multiplicity of rates, acute liquidity crises which adversely affected investors’ confidence.
He however contended that subsequent reforms in the forex market palliated these problems even as he added that subsequent upswing in oil price and increase in oil output brought a great deal of calm and relief to the forex market.
In his words, “The forex regime is moving close to a market driven framework in line with the pointers in the ERGP. The frequent injection of liquidity by the CBN moderated the volatility of the rates and improved forex liquidity. The forex policy reviews, especially the creation of the investors and exporters windows, are impacting positively on forex inflows and boosting the fortunes of the stock market. Although there is still some fine-tuning to be done, the forex regime is heading in the right direction”.
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