The Lagos Chamber of Commerce and Industry (LCCI) has cautioned Nigerian businesses to brace for even tougher challenges in the upcoming year, advising them to prepare for “more stress” as the economic climate worsens.
In a statement issued on Monday, LCCI’s Director-General, Chinyere Almona, highlighted that the persistent rise in inflation—reaching a 28-year high of 34.60% in November—has created an increasingly difficult environment for businesses.
She noted that the situation is likely to worsen with the next meeting of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC), potentially resulting in even higher interest rates.
Almona warned that with inflation showing no signs of abating and prices continuing to rise, businesses will bear the brunt of higher interest rates in the new year, further straining their operations.
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She pointed out that the CBN’s attempts to reduce the currency in circulation had failed, and with a high-spending festive period approaching, businesses should be ready for a prolonged period of economic stress.
The LCCI also expressed concern over the negative impacts of the inflationary environment, including reduced consumer spending, squeezed disposable income, and rising operational costs—all of which hinder economic growth and discourage investment.
In addition, Almona revealed that Foreign Direct Investment (FDI) in Nigeria had plunged to $103.82 million in Q3 2024, a stark drop from $2.6 billion in the previous quarter. This decline suggests that Nigeria’s business climate is becoming less appealing to international investors, further complicating efforts to stabilize the economy.
Despite these challenges, Almona noted that some of the ongoing reforms aimed at boosting domestic production and attracting investment show promise. She emphasized that a coordinated approach to driving oil production, supported by a strong regulatory environment, is crucial for bolstering foreign exchange reserves and stabilizing the naira in the short term.
However, Almona cautioned that Nigeria’s rising food, energy, housing, and transportation costs, coupled with security concerns affecting agricultural production, continue to worsen the country’s economic challenges.
She stressed the need for sustained efforts to address terrorism and crime, ensuring the safety of critical agricultural areas.
Looking ahead, Almona remained hopeful that the ongoing reforms could drive positive economic outcomes if they continue to be implemented effectively.
She concluded by reiterating that with the right policies in place, Nigeria’s economy could return to a growth trajectory and improve key economic indicators.
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