Franklin Alli

The Lagos Chamber of Commerce and Industry (LCCI) has decried the fact that the economy in 2010 remains largely a trading and primary products economy with marginal activities in production.

The Chamber, however, lauded the Federal Government for having grown the economy by 7.8 per cent last year.
In a review of the economy in 2010 and expectations for 2011, LCCI President, Otumba Femi Deru, commended government for growth in GDP from the previously 6.8 percent to 7.8 percent, stressing that 7.8 percent is by all standards a good score for the economy.

According to him, Nigerians are concerned about the poor transmission of this apparent good performance to the real economy through improved productivity, job creation, increased production and better value addition.

The chamber noted that the naira exchange rate last year was stable for most of the year in the official market, ranging from 149-150 naira to the dollar.

“However, at the close of the year, the rate in the parallel market soared to over N155 to the dollar.  This is a disturbing scenario as it has significant implications for prices in the economy.”

It further noted that lending rate in the year under review was stable, but still high.  “Cost of funds is still well over 20 percent for many businesses. Although, for large enterprises the cost of funds was much lower.

However the CBN intervention funds brought some relief to investors that benefitted as the interest rate was much lower and the tenure was longer.”

Also, the energy situation in the country did not improve last year and actually worsened in the third quarter of the year.
“Although there were laudable steps taken to address the energy crisis through the power sector reform.  Many firms had great difficulty coping with the high energy cost in the course of the year. Quite a number closed shop.  The year ended with diesel price soaring to over N115 per litre.”