..says real GDP contracted by 3.62% in Q3
Lagos Chamber of Commerce and Industry has said that the Nigerian economy will end the year in a negative growth territory, within the region of minus two per cent.
President of LCCI, Mrs Toki Mabogunje, at the 132nd Annual General Meeting on Thursday in Lagos, said that inflation rate was expected to sustain its upward trend in the short to medium term.
She attributed it to persistent food supply shocks, foreign exchange illiquidity, higher energy costs, potential foreign exchange adjustment, insecurity and social unrest.
According to her, “Real Gross Domestic Product growth contracted by 3.62 per cent in the third quarter and this marks the second consecutive decline in national output after a 6.1 per cent contraction in the second quarter.
“GDP growth is usually robust in the fourth quarter due to festive-related spending, however, deterioration in consumer’s purchasing power coupled with the disruptive impact of EndSARS protest will most likely dampen recovery prospects in Q4-2020.
“Additionally, the second wave of the pandemic, weakening oil prices and production, and persisting FX pressures are major downside risks to the country’s recovery prospects,” she said.
The LCCI president said there was the need to promote growth-enhancing and confidence-building policies to encourage private capital flows for faster economic recovery.
Mabogunje urged fiscal and monetary authorities to develop a medium term recovery plan anchored on boosting local productivity, supporting ease of doing business and attracting private investment.
She said that the medium term recovery plan should be focused on developing physical and soft infrastructure, business-friendly regulatory policies, economic diversification and employment generation.
On the deregulation of the petroleum downstream sector, Mabogunje said the policy was in the best interest of the economy, as subsidy had for long constituted a burden on Nigeria’s public finances.
“While the deregulation of the downstream sector triggered an increase in the price of goods and services, it remains the most sustainable policy option to attract, retain and sustain private investments in the downstream oil sector,” she said.
Mabogunje said that the Lagos Chamber of Commerce International Arbitration Centre (LACIAC) performed extraordinarily in spite of the negative impact of the COVID-19 pandemic.