The Abuja Chamber of
Commerce and Industry (ACCI) has urged the Federal Government to create valuable economic motivation plan to stimulate growth.
The Chamber’s President, Mr Tony Ejinkeonye, gave the advice in an interview with newsmen in Abuja yesterday.
Ejinkeonye was reacting to the recent Gross Domestic Product (GDP) released by the National Bureau of Statistics (NBS) which stood at -2.06 per cent in the second quarter of 2016.
“Sadly, the nation’s Gross Domestic Product (GDP) has been on the decrease since the last quarter of 2015.
“The NBS report shows that the recent -2.06 per cent (year-on year) in real terms was lower by 1.70 per cent points from the growth rate of –0.36 per cent recorded in the preceding quarter.
“And also lower by 4.41 per cent points from the growth rate of 2.35 per cent recorded in the corresponding quarter of 2015.’’
According to him, this is really not a good time for the country, as economic recession has led to unemployment, lower wages and incomes, as well as lost opportunities.
The chamber’s president said education, private capital investments, and economic opportunity were all likely to suffer in the current downturn.
“The effects will be long-lived if not properly managed. Economic recession can lead to long-lasting damage to individuals’ economic situations and the economy more broadly.
“In terms of individuals’ economic situations, unemployment and income losses can reduce educational achievement by threatening early childhood nutrition; reducing families’ abilities to provide a supportive learning environment and forcing delay or abandonment of school plans.
“While on the economy, recession brings about poverty and the increase in poverty, for example, will have lasting consequences for children, and will impose long-lasting costs on the economy in a bid to alleviate poverty.’’
According to him, there may also be reduction in private investment, which may lead to reduction in production capacity for years to come.
“Furthermore, since technology is often embedded in new capital equipment, the investment slowdown can also be expected to reduce the adoption of new innovations.
“In terms of Entrepreneurial activity and business formation, new and small businesses are often at the forefront of technological advancement.’’
Ejinkeonye said with the credit crunch and the reduction in consumer demand, small businesses were likely to suffer deficit within the period of recession.
He said this was not good for the economy considering the role of small businesses as engine of growth and drivers for job creation.
The chamber’s president stressed the need for government to act urgently to create a valuable economic motivation plan to stimulate growth.
“We may experience growth during recovery periods as unused capacity will be returned to work though the drag, but due to the long-term damage will still prevent the recovery from reaching its full potential.’’
Ejinkeonye said without a stimulus of adequate scale and proper management, the economic situation would be more precarious than its current state.