LCCI Raises Alarm Over Impact Of High Energy Costs And Interest Rates On Businesses

LCCI Raises Alarm Over Impact Of High Energy Costs And Interest Rates On Businesses

The Lagos Chamber of Commerce and Industry (LCCI) has sounded the alarm regarding the challenges faced by businesses in Nigeria, citing high energy costs and interest rates as significant contributors. The recent decisions to increase the Monetary Policy Rate (MPR) and electricity tariffs have exacerbated the difficulties encountered by businesses operating in the country…..READ ALSO Peter Obi Unveils Seven–Point Economic Master Plan

Dr. Chinyere Almona, the director-general of LCCI, expressed grave concerns over the Central Bank of Nigeria’s decision to raise the MPR from 22.75 per cent to 24.75 per cent. Additionally, the chamber views the recent hike in electricity tariffs as adding to the already burdensome cost of living and doing business in Nigeria.

Almona highlighted the impact of these decisions on businesses, particularly in terms of importation and clearing of goods at ports. Fluctuating import duty exchange rates have made planning challenging for businesses, further complicating an already difficult economic environment.

The private sector, vital for growth and employment generation in Nigeria, is facing increased borrowing costs, reduced investment incentives, policy uncertainties, and pressure in the foreign exchange market. SMEs, in particular, are disproportionately affected, as they operate on thin profit margins and heavily rely on affordable credit for sustenance and growth.

The LCCI recommended a shift towards subsidizing production rather than consumption to attract foreign investors. They also stressed the importance of implementing a comprehensive metering program and creating a conducive regulatory framework to enhance foreign investment in the power sector.

To address the challenges faced by SMEs and promote economic growth, the LCCI urged the CBN to reconsider its monetary policy stance and explore alternative measures to enhance credit access and support entrepreneurship. Additionally, they advocated for the creation of an enabling environment for local meter manufacturing to address the shortage in meter deployment across the country.

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