The Lagos Chamber of Commerce and Industry (LCCI) says the 21 years of uninterrupted democracy in Nigeria has earned the country enormous goodwill as one of the few stable democracies in Africa.
Dr Muda Yusuf, Director-General LCCI, said this in its report to celebrate Nigeria’s Democracy Day to newsmen on Sunday in Lagos.
Democracy Day was marked in the country on June 12.
The LCCI chief said that the nation’s economy had benefited from this goodwill as investors were generally more comfortable with a democratic environment.
Yusuf lauded the military over her demonstrations of absolute loyalty, respect and submission to constitutioned democratic authorities over the past 21 years.
He said, however, that Nigeria’s democracy was still work in progress, with room for development in the quality and independence of democratic institutions.
“We recognise that Nigerian democracy is still work in progress, but it is crucial to recognise the importance of these democratic ideals in the sustenance of our democracy,” he said.
The LCCI DG emphasized streamlining the democratic structures for cost-effectiveness and better economics, and reduction in the cost of doing business through the provision of critical economic infrastructures to achieve private sector development and economic recovery.
He also stressed the need to tackle corruption at all levels and sphere of the polity, strengthen the macroeconomic fundamentals of the Nigerian economy, and develop human capital to reduce brain drain.
“The citizens also have an important responsibility to constantly engage the players in the political space for quality assurance in the political governance process,” he said.
On the state of the economy after 21 years of democracy, the LCCI chief said that a review by the Chamber revealed that the country’s macroeconomic fundamentals were largely weak more so, amid the ongoing pandemic.
Yusuf said that the review focused on macroeconomic assessment, global ranking assessment, socioeconomic and welfare assessment, economic diversification assessment, sectoral growth assessment and infrastructural development assessment.
“The macro-indices yardsticks including foreign direct investment, the balance of trade, exchange rate appear driven to a significant extent by the direction of crude oil prices, an exogenous variable beyond the control of economic managers and policymakers.
“The report showed performance was negative in areas of GDP growth, inflation, FDI, public debt, stock market All-Share Index, exchange rate and maximum lending rate within the period reviewed from 1999 to 2019.
“More importantly, we note the decline in FDI flows into the country driven by weak investors’ confidence resulting from heightened regulatory risks, state of infrastructure, policy risks, quality of dispute resolution systems, among others.
“The moderate improvement in foreign reserves within the period could be ascribed to favourable oil prices.
“Improvement in credit to Private Sector and the prime lending rate was driven largely by the aggressive push by monetary authorities for robust credit flows into the real economy.
“Meanwhile, the increase in maximum lending rate underscores the fact that cost of credit remains a challenge for businesses, particularly Micro, Small and Medium-sized Enterprises (MSMEs),” he said.
Yusuf added that while the country improved on ease of doing business and competitiveness ranking, these improvements were not adequately reflected in the reality of the daily experiences of the investor.
He said that performance on corruption perception and human development was weak.
“For Human Development Index (HDI) Ranking, Nigeria fell a spot lower to 158th position in 2018 from 157th position in 2015, still within the low human development category.
“This reflects the poor funding of the education and health sectors at all levels of government.
“The data on trends in per capita income, poverty, unemployment and food inflation supports this position as per capita income fell steadily between 2015 and 2018.
“The poor state of public education and health institutions are graphic illustrations of the situation.
“Productivity issues, quality of the educational curriculum, rising population, weak economic diversification, and fragile economic growth are some of the key drivers of unemployment,” he said.
On sectoral performances, the DG said that the performance of major ten sectors was largely weak, particularly in sectors with the potential to spur economic diversification.
The sectors are agriculture, manufacturing, construction, trade, transportation, ICT, financial institution, real estate, education and human health services.
According to the DG, while the growth of the manufacturing sector advanced to 0.77 per cent in 2019 from -1.46 per cent in 2015, present realities provided evidence that the sector failed to improve within reviewed period.
“More importantly, the real economy (agriculture, manufacturing, trade and constructive) continues to underperform as a result of growth and productivity challenges,” he said.
He called on the political leadership at all levels to rededicate themselves to the creation of enabling environment for private sector development.