By Merit Ibe

The Lagos Chamber of Commerce and Industry (LCCI) has stated that the Nigerian economy proved resilient in 2023 despite the multiple shocks experienced.

President and Chairman in council of the chamber, Gabriel Idahosa, enumerated the shocks to include significant inflationary pressures, consistent currency depreciation,  decelerated economic growth, monetary tightening , debt sustainability challenges, declining real income and high unemployment and poverty levels. 

He, however, noted that the policy reforms by the government in 2023 , especially the removal of fuel subsidies and floating of the exchange rate are expected to  boost fiscal revenue and  contribute moderately to the improvement of the country’s growth prospects in 2024.

Idahosa, who made the remark at the chamber’s 2024 economic outlook and budget analysis, however pointed out that the downside risks to growth prospects include rising cost of living, weak business environment, poor manufacturing performance and rising unemployment. 

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He cited the United Nation’s Department of Economic and Social Affairs (UN-DESA) World Economic Situation and Prospects 2024, which  projected that the country will grow by 3 .1percent  in 2024 and 2025 with inflation expected to gradually ease as the effects of last year’s exchange rate reforms and removal of fuel subsidies  fade.

On his part, Bismarck Rewane, Chief Executive Officer, Financial Derivatives, who spoke on the the topic, Building economic resilience in 2024: Strategies for a sustainable future, noted that this year, possibilities were high that there will be more aggressive tax collection, further reduction of subsidy and minimum wage review. 

He also  pointed out  possibilities of moderate increase in interest rate towards inflation rate and efficient foreign exchange market, advising on the adoption of a wholesale Dutch Auction system to promote transparency and price discovery in the forex market.

The CEO noted that the structure of the Nigerian forex market is characterized by lack of transparency and clear policy direction; lack of effective price discovery measure; capital control and inefficiency;  high speculation and arbitrage activities. 

On the way forward, Rewane emphasised on the need for inevitable policy changes in 2024; Debt rescheduling; management of money supply more efficiently; efficient foreign exchange market; cost reflective tariff; petrol subsidy reduction and wage review.