By Franklin Alli

Lagos Chamber of Commerce and Industry, LCCI,  has called on the three arms of government to focus on revival of critical infrastructure in 2011 “All the three tiers of Government must rededicate themselves to the revitalization of critical infrastructures in the New Year.

The huge infrastructure deficit is the biggest constraint to economic development as well as private sector development in the country”, said Otunba Femi Deru President, Lagos Chamber of Commerce and Industry in a review of 2010 and expectation for 2011.

“The national and state assemblies should ensure that the budgets are constructed in a way as to add value to the lives of the citizens thorough the provision of infrastructure facilities and the development of human capital”, he added.

He said the body would also want the government to address the rising energy cost occasioned by rising fuel prices. “As the global oil prices increases, so would energy cost to investors.

High oil prices are good news for the government because of the positive impact on revenue; it is good news for oil producers; but it is bad news for energy consumers because it means escalation of energy cost.

Diesel which is the main fuel for power generation and haulage for many firms in the country and it has been fully deregulated. This means it is the global prices that drive the domestic oil market conditions because the nation’s refineries are operating sub-optimally.

Already the private sector is beginning to feel the heat as diesel has gone up to N115 per litre in the Lagos area. It will be much higher outside Lagos.

If this trend persists, it will be necessary for government to intervene (pending the outcome of the power sector reform) to subsidize the cost of diesel to reduce the rate of business collapse in 2011.  The energy cost is fast approaching unbearable thresholds for most firms.”
“We commend the efforts of the CBN in its intervention to reduce cost of funds and provide long term funds for investors.

This intervention should be sustained in the 2011 to save the economy from the agony of high interest rate and short tenure funds.  Efforts to ensure access of SMEs to funds should be further intensified in the 2011.

“Governments at all levels should rededicate themselves to the spirit and ideals of local content policy to ensure the mainstreaming of domestic firms in the economy.  Patronage of local firms is critical to employment generation, local value addition and the general development of the economy.

All projects should carry local content clauses and this condition should be elevated to the status of a national policy.  A lot will be achieved in job creation if this policy is adopted and fully implemented.

“As we enter the New Year, the credibility and integrity of the electoral process are critical for the sustenance of investors’ confidence and the modulation of business risks. Historically, election years come with an escalation of security and political risks in the investment environment.

The degree and impact of these risks would depend to a large extent on the credibility and integrity of the electoral process.  It is thus very critical that the process is credible and seen to be so.

There is need to ensure adequate security of lives and property in all parts of the country, especially as political activities intensify.  This is necessary in the light of the recent spate of attacks and bombings in the country.  This is also crucial to strengthen business confidence.