Lagos- Goodie Ibru, President of Lagos Chamber of Commerce and Industry(LCCI), on Thursday said that the Business Confidence Index (BCI) in Nigeria had declined.
Ibru made the declaration at the LCCI quarterly press briefing on the state of the economy in Lagos.
According to him, the BCI fell to 17.6 per cent in the fourth quarter from 24 per cent in the third quarter.
Ibru said that the pessimism of industry operators and challenges confronting the sector made it the worst affected.
“Manufacturing enterprises in the economy are still grappling with the problem of unbridled importation of consumer products into the country.
“Generally, these products are cheaper and sometimes sub-standard.
“The high cost of doing business, coupled with the inhibitive activities of government regulation and monitoring agencies at both federal and state levels have not created room for the survival of the sector,” he said.
Ibru said that there was an urgent need to regulate the charges imposed by certain regulatory agencies on businesses, adding that some of them had become burden on businesses.
“Some of these agencies come across more as revenue generating outfits than regulatory agencies
“Government should ensure adequate funding of these agencies so that they do not constitute more burdens to the private sector.
Ibru suggested a reduction in corporate tax paid by manufacturers, currently pegged at 30 per cent, in order to sustain the sector and to create jobs for the unemployed.
“Import duty on raw materials, machineries and other vital inputs for manufacturing should be scrapped.
Ibru commended the Central Bank of Nigeria (CBN) in stabilising the price and exchange rates, adding that they had helped to reduce inflation rate to a single digit.
LCCI President, however, said that the increase of the Cash Reserve Rate (CRR) on public sector deposits from 12 per cent to 50 per cent had impacted negative on the economy.
“There is a heightened pressure on interest rates as a result of tighter liquidity conditions.
Ibru warned that the nation’s current debt stock was unsustainable because of resources being committed to debt servicing.
“Data from the Debt Management Office indicates that the current debt profile of the country is 53.4 billion dollars as at September out of which domestic debt is 45 billion dollars.
"The cost at which government is borrowing is too high and creating distortions in the credit market,” he said.