LCCI says insecurity weakening investor confidence in Nigeria

THE Lagos Chamber of Commerce & Industry (LCCI) says the state of insecurity in  Nigeria weakens investor confidence, noting that its effects on Africa’s most populous nation remain profound and multi-dimensional .

In a statement made available to The ICIR on Wednesday, LCCI President Toki Mabogunje expressed sadness that kidnapping, herder-farmer conflicts, ethno-religious violence, vandalism, armed robbery, banditry, arson, and insurgency had become routine occurrences in Nigeria.

“The crisis has crippled many private and public investments across the nation. Several businesses and investors in affected areas are currently counting their losses. Many households have lost their means of livelihoods, while some have been displaced,” it said.

“Many farmlands across the country (although more pronounced in the North and Middle Belt) have been destroyed in the process, and this has continued to disrupt agricultural activities in these areas. These have severe implications for food production and food distribution from farms to markets.”

She noted that insecurity was a major reason for the persistent increase in food inflation in recent years, stressing that worsening security situation would further trigger inflationary pressure on food prices, thus exacerbating poverty conditions in the country.

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“This alarming state of insecurity in the country has hampered the movement of goods, services, and persons across the country, with implications for agriculture, agro-allied services, trade and commerce, especially in affected areas. Transportation & logistics sector, hospitality and allied investments, education, construction, and real estate have been severely impacted by the crisis.”

While lamenting that the crises projected the Nigerian economy as an unsafe investment destination, Mabogunje was equally worried that the government’s efforts in encouraging private investment inflows into the economy at a time the economy was in dire need of massive investments to bolster growth recovery, create jobs and alleviate poverty could be thwarted if nothing was done to address the situation.

She stressed that the crises would further weaken the already investors’ confidence which had been hard hit before the outbreak of COVID-19. She noted that many investors would see the Nigerian market as a risky market despite oil price recovery, vaccination dissemination and growth recovery.

“The worsening security situation also impacts the fiscal position of the government by making policymakers incur unplanned [unbudgeted] security-related expenditure at the detriment of infrastructural development expenditure. This could worsen 2021 actual fiscal deficit levels amid fragility in revenue growth from oil and non-oil sources.”






     

     

    In order to stem the trend and boost investor confidence, the LCCI called for the decentralisation of the security ecosystem which would help to stem the rising tide and enable other levels of government to take key security-related decisions and initiatives within their domains.

    She enjoined the executive arm of government to liaise with the legislative arm to take security out of the Exclusive List and include it in the Concurrent List of the Nigerian Constitution.

    Also, sub nationals “need to play more active roles in the restoration of peace in the country through the creation of security machinery and architecture that would be controlled by them, subject of course to certain guidelines, especially regarding the rules of engagement,” she explained.

    “There is a need to ensure a concrete and sustainable means of reducing the youth unemployment rate through youth employment schemes and programmes. There is a strong correlation between unemployment and criminality.”

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