The Lagos Chamber of Commerce and Industry (LCCI) has called on the federal government to increase the country’s minimum wage to ameliorate the impact of the harsh reforms being initiated by the President Bola Ahmed Tinubu administration.
It made the call on Saturday in its statement on Nigeria’s Independence anniversary entitled: ‘The Nigerian Economy at 63: Sustaining Reforms and Promoting Macroeconomic Stability,’ which was signed by its President, Dr. Michael Olawale-Cole.
He said: “LCCI recognises the impacts of the reforms on vulnerable workers and low-income earners. The chamber is of the view that there is urgent need to review the wage structure of Nigerian workers. At $30 for 30 days, the minimum wage is extremely poor.
“With high inflation rate, volatile exchange rate, low GDP growth, weak infrastructure, insecurity, etc., I call on the federal government to address the macroeconomic issues and the insecurity challenges facing the country.”
Olawale-Cole also observed that the country’s “business environment remains a concern to investors, especially in the real sector. Weak infrastructure, uncertain policy environment, and institutions have continued to adversely affect the efficiency, productivity, and competitiveness of many enterprises. These conditions pose a major risk to job creation, economic inclusion, and competitiveness, especially with the Africa Continental Free Trade Area (AfCFTA) agreement now in place.”
He said that “the way forward is to address the fundamental constraints to manufacturing competitiveness. In reality, job losses in the sector have increased over the decades as productivity declined on the back of the difficult operating environment.
“Our nation is at a crossroads and in dire need of big decisions to drive the drastic transformation the economy required to return to meaningful economic prosperity.”
The chamber recalled that the Central Bank of Nigeria (CBN) in its July 2023 MPC meeting increased the benchmark interest rate by 25 basis points to 18.75 per cent from 18.5 per cent and commented that “this consistent hawkish stance by the monetary authority is in response to the high inflationary pressure, consistent weakening in the value of the local tender, and developments in the global economy.”
The chamber also identified poor power supply, insecurity and weak infrastructure as major burdens on businesses in Nigeria.
It said power supply has been on progressive decline since 1960 when the country gained its independence from Britain.
“Power supply has consistently lagged behind the pace of economic activities and population growth. This development impacted negatively on investment over the past few years with increased expenditure on diesel and petrol by enterprises. This also comes with the consequences of declining productivity and competitiveness. With the frequent collapses recorded by the national grid, we can no longer rely on a centralised power source. The way to go is renewable energy and decentralising the national grid,” the LCCI said.
It also emphasised that the country’s security situation has deteriorated in the past year and has assumed a very worrisome dimension at the detriment of inflow of investments into the economy.
“Poor infrastructure particularly in the areas of road, rail, ICT, ports, etc. is a big challenge to Nigeria’s socio-economic development. The water and sanitation sector has inefficient operations, with low and declining levels of piped water coverage.
“Irrigation development is also low relative to the country’s substantial potential. Addressing Nigeria’s infrastructure challenges will require sustained expenditure of almost $14.2 billion per year over the next decade, or about 12 per cent of GDP.
Dike Onwuamaeze
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