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Business News of Thursday, 29 April 2021

Source: www.mynigeria.com

Worsening insecurity to trigger higher inflation, poverty - LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has reacted to the worsening security situation in the country.

According to the chamber, if unchecked, the multidimensional effect remains profound, especially as regards higher inflation and poverty.

The chamber also stated that the crisis has crippled many private and public investments across the nation, while several businesses and investors in affected areas are currently counting their losses.

With further inflationary pressure on food prices that has exacerbated the poverty conditions in the country, the chamber added that many households have lost their means of livelihoods, while some have been displaced.

Nigeria’s food inflation, a closely watched index, spiked to 22.95% in March from 21.79% recorded in the previous month, as food prices and cost of transportation got out of the reach of the average Nigerian whose incomes have stagnated.

Mrs Toki Mabogunje, the LCCI President, in her comments on the state of insecurity yesterday, stated that the alarming state of insecurity in the country has hampered the movement of goods, services, and persons across the country, with implications for agriculture, agro-allied services, trade and commerce, especially in affected areas.

She added that the crisis projects the Nigerian economy as an unsafe investment destination, and if unaddressed, would thwart the government’s efforts in encouraging private investment inflows into the economy at a time the economy is in dire need of massive investments to bolster growth recovery, create jobs and alleviate poverty.

“We note that investors’ confidence had been weak before the covid-19 outbreak, and many investors still see the Nigerian market as a risky venture despite the oil price recovery, vaccination dissemination and growth recovery. We believe confidence will remain weak in the short term if the situation does not abate.

“The worsening security situation also impacts the fiscal position of government by making policymakers incur the unplanned security-related expenditure at the detriment of infrastructural development expenditure. This could worsen 2021 actual fiscal deficit levels amid fragility in revenue growth from oil and non-oil sources”, she added.

She, therefore, urged the executive arm of government to liaise with the legislative arm to take security out of the exclusive list of the Nigerian constitution and include it in the concurrent list.

This move, according to her, will enable sub-nationals to play more active roles in the restoration of peace in or country through the creation of security machinery and architecture that would be controlled by them, subject of course to certain guidelines, especially regarding the rules of engagement.

She also emphasised the need to ensure a concrete and sustainable means of reducing the youth unemployment rate through youth employment schemes and programmes, adding that there is a strong correlation between unemployment and criminality.

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