By Yinka Kolawole

The Lagos Chamber of Commerce and Industry (LCCI) has said that the federal government can spearhead reforms in the manufacturing sector by tackling the key cost drivers inhibiting the growth of the sector.

President of LCCI, Gabriel Idahosa, who stated this at a media conference on the State of the Economy in Lagos, highlighted several areas of possible intervention.

His words: “In light of increasing global economic shifts, we urge the government to spearhead transformative reforms in the manufacturing sector by addressing critical cost drivers such as high inflation, interest rates, multiple taxation, and exchange rate volatility.

“Strategic measures should include instituting single-digit tax regimes for manufacturing entities, stabilising the naira through proactive foreign exchange policies, and leveraging public-private partnerships to reduce production costs.”

Idahosa further noted that the micro, small and medium enterprises (MSMEs) remain the backbone of nation’s economy, adding that they are confronted with significant challenges, including inadequate access to finance and unreliable power supply.

He stated: “MSMEs remain the backbone of Nigeria’s economy, and we urge the government to expand access to credit at concessionary rates below the prevailing CBN MPR. “Additionally, introducing technology-driven lending platforms and tailored financial literacy programs can empower MSMEs to scale operations effectively.

“These steps will mitigate the rising cost of production, safeguard employment, and improve the competitiveness of Nigerian products in regional and global markets.

“A 2024 survey by PWC revealed that 35% of businesses identified limited financing as their primary growth inhibitor, while 21% highlighted poor electricity as a major operational hurdle. These constraints stifle the growth potential of MSMEs, which are vital contributors to Nigeria’s GDP and employment.

“To support MSMEs growth, the government should facilitate access to affordable financing by collaborating with financial institutions to develop MSME-friendly loan products with lower interest rates and simplified application processes.

“Additionally, investing in reliable power infrastructure or providing incentives for alternative energy solutions can alleviate the energy challenges faced by small businesses, enabling them to operate more efficiently and competitively.”