The Lagos Chamber of Commerce and Industry (LCCI) has advised organised private sector to leverage creativity and innovation to rebuild a competitive economy post-COVID-19.
Mrs Toki Mabogunje, President LCCI said this at the Chamber’s second quarterly briefing on the state of the economy on Tuesday in Lagos.
Mabogunje said creativity and innovation were necessary with the COVID-19 pandemic pushing the global economy (Nigeria inclusive) to the precipice.
According to her, opportunities for productivity and economic optimization abound in sectors like healthcare, agriculture and food, manufacturing and ICT, amongst others.
“In light of the foregoing, therefore, policymakers and the organized private sector need to come together to rescue the economy from collapse at this critical time.
“We, however, believe there is also need for sustained improved domestic productive capacity and human resources in priority sectors,” she said.
On agricultural production, Mabogunje said that although the sector remained the largest sector of the Nigerian economy and employed two-thirds of the entire labour force, production hurdles have significantly stifled the performance of the sector.
According to her, the main factors undermining production include reliance on rainfed agriculture, smallholder land holding and low productivity due to poor planting material, low fertilizer application and a weak agricultural extension system, amongst others.
She projected that with the COVID-19 induced lockdown in some states, the food situation was most likely to worsen with farmers having to cope with movement restrictions and paralyzed supply chains.
According to her, transport restrictions and quarantine measures are likely to impede farmer’s access to markets thus curbing their productive capacities and hindering them from selling their produce.
This, she said, would most likely drive up food inflation which currently stands at 14.98 per cent and has been a major driver of headline inflation with increasing food prices.
“We commend the effort of the Minister of Agriculture and Rural Development in inaugurating a joint technical task team on emergency response to COVID-19.
“However, we are of the opinion that more actions are required beyond the free and unhindered movement of food.
“We, therefore, urge the Minister to work with relevant agencies for farmers to adhere strictly to health measures both in and outside the farm and create a biosecurity protocol for producers of animal products as well as fresh fruit/vegetable producers.
“We strongly believe that this would address any consumer fears that may arise as well as curb any possible transmission of COVID-19 through agricultural products,” she said.
To enable businesses to navigate the storms as well as preserve employments, Mabogunje said it was imperative to have an urgent rescue package in recognizing the role of business and investment in the economy.
She stressed the need for a year’s tax break for healthcare and pharmaceutical companies, airlines, manufacturers, agro-processors, SMEs and hospitality players.
In addition, she urged for the temporary suspension of the 50 per cent increase in Value Added Tax (VAT) rate till year-end and the suspension of P.A.Y.E for the next six months.
This, she said, would help boost the purchasing power and aggregate demand, thereby stimulating the economy.
“Agro-processing companies should enjoy import waivers for the next one year. This is critical to support food security and agricultural supplies.
“Commercial banks are implored to offer reprieve to businesses and corporates indebted to them which could be in form of loan moratorium and restructuring,” she said.
Mabogunje also urged the Central Bank of Nigeria to review the cash reserve ratio downwards to 20 per cent from the current 27.5 per cent to enable commercial banks to have more liquidity to support businesses.
“While we commend the government on the various measures already put in place to cushion the effect of this pandemic both on individuals and businesses, we are concerned that the current approaches used in implementing some of these measures would not yield the desired result.
“There is, therefore, a need for restrategising and ensuring proper coordination both at the states and federal level.
“We urge the government to focus on the completion of critical infrastructure projects nationwide such as the Lagos-Ibadan expressway, Lagos-Ibadan rail project, Enugu Airport, the Second Niger Bridge, East-West Road.
“Also, there should be an upgrade of power and broadband infrastructure across the country in order to support ICT and digital economy,” she said.