The Lagos Chamber of Commerce and Industry (LCCI) says inflation rate will rise in 2021.
The chamber made the assertion in its Economic Review for 2020 and Outlook for 2021 made available to newsmen, yesterday in Lagos.
Its Director-General, Dr Muda Yusuf, attributed the projected inflation outlook for the incoming year to the combination of food supply shocks, heightened insecurity in major food-producing states, foreign exchange policies, illiquidity and higher energy costs.
“We, however, believe a broad-based harmonisation of fiscal and monetary policies towards addressing the identified structural constraints will significantly help to moderate inflationary pressure in the medium term,’’ he stated.
On sectorial review and outlook, the LCCI’s D-G said performance was largely weak across sectors in the third quarter of 2020 because of lingering effects of Covid-19 disruptions.
Yusuf stated that the trend would likely persist into the last quarter of 2020 and the first quarter of 2021 as the economy gradually recovers from the recession.
He noted that a resurgence of Covid-19 pandemic would cause another disruption in activities in the oil and non-oil sectors.
“We expect Information, Communication Technology, financial institutions, and agriculture to drive growth in the non-oil sector in the short-term while the country’s commitment to Organisation of Petroleum Exporting Countries (OPEC) agreement is expected to dampen recovery prospects of the oil sector,’’ he stated.
On Agriculture, the LCCI’s D-G said he foresaw the CBN sustaining its intervention in the sector in year 2021 in a bid to boost domestic food production and minimise food supply gap.
“While the ban on importation of rice, poultry and other agricultural commodities still subsists amid border reopening, there is risk of resurgence of smuggling of agricultural products into the country considering the porous nature of Nigeria’s land borders.
“This, combined with the commencement of Africa Continental Free Trade Area (AfCFTA), could see Nigeria being a destination for imported food products in the absence of adequate border monitoring measures.
“Additionally, heightened security concerns around the country, especially in the northern part and resurgence in herder-farmer conflict in the Middle Belt, the southwest and southeast, if unaddressed, will hamper local food production in the near term.
“Nonetheless, we expect a modest growth performance in year 2021,’’ he said.
As outlook for the manufacturing sector, Yusuf said the reopening of the land borders should provide succour to the sector even as the kick-off of AfCFTA serves as an avenue for manufacturers to penetrate new African markets.
He noted that critical challenges currently beguiling the sector alongside the new competitiveness pressure foisted by the AfCFTA might dampen the recovery prospects of the sector in year 2021.
“We expect the CBN to sustain its intervention efforts in the manufacturing sector as part of measures to boost economic recovery.
“We see the CBN maintaining policies that support credit extension to the real economy.
“The low interest environment in the money market favours big manufacturing players in terms of raising cheap capital, but the business environment will remain challenging for manufacturing SMEs.
“In our view, credit flows to the manufacturing sector will fail to achieve desired outcomes without putting in place measures to address structural, bottlenecks in the ports and customs processes and other policy challenges to productivity.
“Thus, we see growth of the manufacturing sector being subdued in the near to medium term,’’ he said.
Yusuf said the banking industry was expected to sustain positive growth trajectory in Q4-2020 amid the numerous regulatory limitations.
“We expect CBN to maintain its regulatory surveillance in the industry in ensuring the industry is financially sound amid evolving Covid-19 disruptions.
“Resurgence of Covid-19 pandemic, oil price volatility sluggish economic recovery and lingering external pressure are major downside risks to the growth prospects of the banking sector in year 2021.
“Loan-to-Deposit-Ratio policies drove the impressive performance in Q1-2020 by 24 per cent and Q2-2020 by 28.41 per cent.
“Momentum eased in Q3-2020 (6.8 per cent) as banks became more reluctant in providing credit to business given weak macroeconomic conditions.
“Nevertheless, banking industry remained financially sound with Capital Adequacy, Non-Performing Loan Ratio and Liquidity Ratio at 15.5 per cent, 5.73 per cent and 35.6 per cent as of end-October 2020, respectively,’’ he said.
The LCCI’s D-G said the oil sector would further contract in Q4-2020 in the light of lower production in compliance to OPEC+ agreement.
“We note OPEC+ has agreed to ease supply cut by 0.5 million barrels per day starting from Jan. 1, 2021 due to sluggish recovery in fuel demand, much lower than 2.0 million barrels per day earlier planned.
“Crude oil production will likely be lower in year 2021 as OPEC+ sustains efforts to prevent oil glut.
“We project that OPEC+ will be cautious in relaxing output reduction given the uncertainties around Covid-19 pandemic and global oil demand.
“Thus, we expect oil and gas sector growth to be subdued in year 2021 on the continued implementation of OPEC+ Declaration of Cooperation and weak oil price outlook.
“Also, increasing preference for renewable energy globally will put downward pressure on crude oil demand and prices. We are not optimistic of a significant growth performance in oil industry in year 2021,’’ he said.
He said that considering the dim outlook for revenue in the face of weak economic fundamentals, government would most likely underperform its revenue projections with attendant impact on fiscal deficit and debt portfolio.
“Budget deficit for year 2021 is expected to remain elevated above the projected N5. trillion and this poses a risk to Nigeria’s fiscal sustainability.
“We believe the Federal Government will be inclined towards securing concessionary borrowings with low interest rate and long maturity profile in the global market, rather than raising Eurobonds, especially now that the country is faced with foreign exchange scarcity,’’ he said.
Senate Urges NDDC To Complete Okitipupa Power Sub-Station
The Senate yesterday in Abuja urged the Niger Delta Development Commission (NDDC) to complete the installation of a transmission power sub-station in Okitipupa council of Ondo State.
According to the Senate, completing the installation of the transmission power sub-station is urgent in order to restore electricity to Ondo South Senatorial District comprising Okitipupa, Ilaje, Ese-Odo, Irele and Odigbo Local Government Areas (LGAs).
This was contained in a statement signed by Mr Olumide Akinrinlola, the media aide of Senator Nicholas Tofowomo, representing Ondo South at the senate.
He said that the senate acted on the motion filed by Tofowomo on, the urgent need to restore power back to the affected area before the end of the year.
The Senator, who is of the Peoples Democratic Party (PDP), lamented that the Southern Senatorial District was hosting the Omotosho Power Plant in Okitipupa LGA with a capacity of 512.8MW and 451MW Net since 2005 without residents benefitting from power supply.
“The situation is embarrassing because I continue to wonder if Ondo South is part of Nigeria because suffering from electricity blackout for about 14 years has grounded many economic activities.
“Almost 90 per cent of my people have been deprived of electricity since 2007 and since put them uninterrupted darkness.
“The district is hosting the Omotosho Power Plant in Okitipupa LGA with a capacity of 512.8MW and 451MW Net since 2005 without the people benefiting from the distribution of electricity.
“The intervention came in 2012 by NDDC in a contract; 132KV transmission and 132KV/33KV sub-station and line were awarded in Okitipupa LGA.
“As at today, 85 per cent of the job has been completed and all the 145 Transmission Line Towers from Omotosho Power Station to the Sub Station has been completed.
“The sub-station’s outstanding works remain 15 per cent of which can be accomplished without delay if all the necessary machinery are put in place.
“The substation can be ready for transmission to the federal feeders in Irele, Odigbo, Ilaje, Ese-Odo and Okitipupa LGA within the shortest possible time,” Tofowomo told the senate.
Delta Assembly Passes Anti-Grazing Bill
The Delta State House of Assembly yesterday passed a Bill for a Law Prohibiting Open Grazing, Indiscriminate Breeding, Rearing and Marketing of Livestock in Delta also known as “Anti Grazing Bill”.
The passage of the bill followed a motion for the third reading moved by the Majority Leader of the House, Mr Ferguson Onwo, during the plenary of the Assembly in Asaba.
The motion which was unanimously adopted by the house, was seconded by the Minority Leader of the Assembly, Mr Innocent Anidi.
Earlier, the Chairman of House Committee on Special Bills, Mrs Pat Ajudua, had presented the report on the bill on the floor of the House, which was received and adopted.
Ajudua, while presenting the bill, said that inputs of stakeholders formed part of the proposed law.
She noted that the bill when signed into law would prohibit the carrying of firearms, either licensed or otherwise, by residents or individuals in the state, just as it seeks to address the arbitrary rearing and movement of livestock.
In his reaction, the Speaker, Chief Sheriff Oborevwori, expressed happiness over the development, saying that the people and residents of the state would be very happy that the bill was passed.
“Dear colleagues, I congratulate all of us on the passage of this very important bill.
“Today, the house has fulfilled the commitment of our dear state to the agreement reached at the South-South Governors’ meeting held here in our state capital, Asaba.
“By virtue of this bill, this house has demonstrated its resolve to protect the people of the state from the menace of clashes between herders and farmers.
“I must therefore, commend all the sponsors of this bill, for recognising that the security of lives and property of the people of the state as enshrined in the Constitution of the Federal Republic of Nigeria, 1999 (as amended) are sacrosanct,” Oborevwori said.
Oborevwori said that with the passage of the bill, well-meaning persons who seek to carry on the business of breeding, rearing and marketing of livestock should do so within the boundaries of the law.
“Also, farmers can now go about their businesses without fear of anyone grazing on their crops.
“This for sure will boost food production in the state; dear colleagues, this Bill is a right step in the right direction as our women can now go to their farmlands without fear of molestation.
“Once again, I thank you all for your untiring support as always and for your resolute commitment in the passage of people oriented bills, such as this.”
FG Tasks Media On Fight Against Fake News, Misinformation
The Federal Government has urged the media to complement the government’s efforts in the fight against fake news and misinformation in the country.
The Secretary to the Government of the Federation (SGF), Boss Mustapha gave the advice yesterday at a training of “Communication Managers on Fake News and Hate Speech’’ in Abuja.
The training was organised by the Bureau of Public Service Reforms.
Mustapha, represented by Mrs Veronica Agugu, the Director, Public Affairs Department in the office of SGF, described fake news as false and misleading information presented as news.
He urged media practitioners and managers to assist in bridging the divide between governments and citizens in terms of implementation of government reform policies and programmes.
“Strengthening transparency in governance will require public sector to public communication as a tool to systematically raise citizens awareness which in turn would reduce the potency of hate speech in the country,’’ Mustapha said.
Dr Bala Muhammad, a lecturer at the Department of Mass Communication, Bayero University, Kano State, described media managers as media literates.
He urged them to unite against fake news and misinformation to promote peaceful co-existence in the country.
Muhammad said that most of the users of social media were not media literate, hence they easily fall for fake news and misinformation in the country.
Mr Yushau Shuaib, one of the resource persons, expressed concern over the huge number of social media users who were not media literate.
Shuaib stressed the need for relevant stakeholders to redouble their efforts in regulating the activities of social media in the country.
Mr Dasuki Arabi, the Director-General, Bureau of Public Service Reforms, said the training was to tackle the growing incidences of fake news, and hate speech occasioned by internet technology in the country.
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