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The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has decried the Central Bank of Nigeria (CBN's) recent policy pronouncement to increase Cash Reserve Requirement (CRR) on public sector deposits from 12 per cent to 50 per cent.
The President, NACCIMA, Alhaji Mohammed Abubakar, explained that the move by the CBN has started to send threatening alerts to the stability in the financial system, stating that the cost of doing business was escalating and lending rates also soaring since there would be less money to lend to businesses in the country.
Abubakar, during NACCIMA's media briefing on the state of the nation, however counseled that the CBN should review the CRR on public sector deposits downwards to 20 to 25 per cent so as to reduce the shock on the financial system and avert another round of distress in the banking sector.
He also expressed concerns of the continued retention of CBN's high Monetary Policy Rate (MPR) at 12 per cent stating that, it has made interest rates very high and unaffordable to borrowers.
"While we support the existence of regulatory agencies to bring sanity to bear in the economy, we are worried that the charges by regulatory and business agencies have become too high and even overlapping, thus, constituting a major burden on businesses, especially manufacturing industries," he said.
He therefore called on the federal government to streamline and address the high and multiple charges of these agencies stating that with adequate funding provided by the federal government, the charges would be reduced to a level that will not constitute a burden to the private sector.
According to him, the business community has continued to be confronted with numerous taxes and levies being demanded by the three tiers of government, thus creating untold burden and distractions for business operators.
He pointed out that in spite of the enormous spending by government on transportation infrastructure across the country, the desired positive impact is yet to be felt by the business community and citizens.
“This is so because a good number of Federal and State roads are in deplorable conditions, compounding the already high cost of doing business in the country. We therefore counsel that there is need for government to continue to sustain collaboration with the private sector through the on-going Public-Private Partnership (PPP) arrangement to ensure the provision of adequate and reliable transportation infrastructure in the country,” he said.
While applauding the federal government on the successful handling over of the unbundled companies of the Power Holding Company of Nigeria (PHCN) to private sector core investors, the NACCIMA boss appealed for the acceleration of the privatisation of the four government owned petroleum refineries, saying that the private sector is best placed to operate social infrastructure as witnessed in other countries.
On agriculture and agri-business development, he noted that the government's intervention with respect of infrastructural facilities and incentives to boost real investment in the sector have not achieved significant positive impact as desired.
He pointed out that the nation was still grappling with low productivity, low profitability and competitiveness, insufficient food for local consumption and poor value chain.
“We recommend that this sector should receive the urgent attention that it deserves while the agricultural bank should be adequately recapitalised to enable it effectively cope with the huge demands that the pending agribusiness evolution will make on it," he said.
He said as a result of this, agricultural research institutes should be empowered to enable the nation to produce at cheaper rate, thereby enhancing the country's competitiveness in the global market place.
In his words, “Gross Domestic Products (GDP) growth rate figure dropped from 6.56 per cent in first quarter of 2013 to 6.18 per cent in second quarter of 2013 while third quarter figure is yet to be released while external reserves went down from $45.43 billion in January, 2013 to $45.06 billion in October, 2013.”
He noted NACCIMA's concerns on the 24 hours policy cargo clearance promised by the government, saying that it is yet to become a reality as the issue of cargo congestion has continued unabated at the nation's ports compounded with too many inspection and government agencies.
“This situation does not portend the country as becoming a preferred hub for cargo destination; hence, we urge government and its agencies to come up with pragmatic and efficient solution to address the problem head-on. PPP arrangement is suggested for the development of new ports," he added.