The Lagos Chamber of Commerce and Industry (LCCI) wishes to commend the CBN Governor on his successful outing at the CIBN’s 58th Annual Bankers Dinner and the Grand Finale of the Institute’s 60th Anniversary. However, we are concerned about the state of the economy, particularly the volatile foreign exchange situation, high inflation, and general uncertainty.

Over the year, the Chamber has consistently expressed concerns about the implications of high inflation, high interest rate and unstable exchange rates on businesses and households.

The Chamber is aware of the enormous challenges and the uphill task before the CBN in ensuring macroeconomic stability and restoring investors’ confidence. However, we note the inconsistencies between the federal government’s vision of achieving a $ 1 trillion economy in the next six years and the medium-term expenditure framework (MTEF). Meanwhile, macroeconomic projections in the MTEF state that the economy will grow by 3.76%, 4.22%, and 4.78% in 2024, 2025, and 2026, respectively. We note that the projected growths are sub-optimal to achieve a $1 trillion GDP by 2029, which implies an average growth of 21% over the next six years.

The Chamber appreciates the intellectual humility of the Governor in admitting the errors or mistakes of the past, particularly in the areas of corporate governance failures, diminished institutional autonomy of the CBN, deviation from the core mandate of the Bank, and unorthodox use of monetary tools and foray into fiscal activities under the cover of development finance activities. As we advance, we challenge the current CBN team to ensure professionalism and integrity and rebuild the trust of the general public.

On recapitalization of banks, we commend the plan of the CBN to review the minimum capital base of banks due to consistent devaluation of the Naira, which has eroded the capital base of banks, attracted significant investment into banks as well as increased the capacity of banks to provide the required support for the economy. However, we caution the CBN to strengthen its banking supervision to avoid “Too big to fail” banks.

Given the sensitivity of monetary policy and price stability, we urge the CBN to ensure transparency and synergy between monetary and fiscal authorities and effectively communicate significant changes in policy direction.

The Chamber recommends that the CBN adopt the right policy mix to control high inflation effectively and ensure the stability of the exchange rate in order to support growth and job creation. Furthermore, we stress the need for CBN to be committed to promoting integrity, good corporate governance, and the highest ethical standards.

DR CHINYERE ALMONA, FCA

DIRECTOR GENERAL

LAGOS CHAMBER OF COMMERCE & INDUSTRY

26 NOVEMBER 2023