The Lagos Chamber of Commerce and Industry (LCCI) predicts that the Nigerian economy will show better economic performance in the third and fourth quarters of the year.
This was announced by Mrs Toki Mabogunje, LCCI President, at LCCI’s Quarterly State of the Economy Conference on Tuesday in Lagos.
They said the improvement in performance was primarily due to the small base effect resulting from the performance of the third and fourth quarters of 2020, driven by massive political support and continued use of vaccination in advanced economies.
“Juxtaposing the current growth level with population growth estimated at 2.7 per cent by the World Bank implies the economy, as of Q2 2021, was almost at the same growth level with the population growth on average.
“We only hope to see this strong growth level continue into the rest of the year. Nigeria’s actual output performance is still below its potential output level as recorded in the pre-COVID-19 period. Achieving key development outcomes such as employment creation and poverty reduction will always remain elusive in the light of fragile recovery”, she said.
The LCCI president said that the International Monetary Fund (IMF) and the World Bank forecast growth rates of 2.5 per cent and 1.8 per cent reforms in the oil sector, respectively, on the assumption of stronger commodity prices, transition to market-reflective exchange rate system, vaccination progress, and the successful implementation of reforms in the oil sector.
She noted that while these factors appear reasonably realistic, growing uncertainty, persistent lack of foreign exchange liquidity, low vaccination rates, and unwillingness to implement critical reforms pose significant downside risks to the growth prospects of the country’s economy.
She also said that manufacturing had maintained a positive growth trajectory following contractions in 2020, aided in part by interventions by the Central Bank of Nigeria as part of development finance amidst numerous headwinds faced by actors in the industry, citing that the areas of manufacturing industries with a high degree of backward integration had a lower degree of shocks due to currency crises in the economy.
She advised the government to support the business climate for micro, small and medium-sized enterprises (MSMEs) and large companies at the national, sub-national and local levels, as this was crucial to facilitate the participation of the private sector in the economic recovery process, on the basis that the government should pay more attention to the needs of the laying goose; the private sector, beyond the issues of collection and distribution of VAT.
“The private sector accounts for over 80 per cent of total economic activities in Nigeria and it is therefore imperative to ensure an enabling operating environment for investors in the economy,” she said.
