GDP GROWTH NOT VISIBLE IN THE ECONOMY - LCCI

The Lagos Chamber of Commerce and Industry (LCCI), said despite the impressive growth figures of the Gross Domestic Product (GDP) recorded, the impact on private sector performance and welfare of the Nigerian people is not visible.

Speaking at the second quarterly press conference on the economy, the President of LCCI, Otunba Femi Deru, said the growth outlook for the year looks good because of improvements in the oil economy and, according to the National Bureau of Statistics (NBS) economic outlook, GDP is expected to grow by 7.98 per cent in 2011 as against 7.85 per cent recorded in year 2010, but that this growth has not impacted on private sector performance and welfare of the Nigerian people.

'We are worried about the harsh operating environment, which has not abated, even as we post impressive growth figures. The power situation is still bad, cost of diesel and aviation fuel is unbearable, many intercity roads are still in deplorable state; the railways rehabilitation is sluggish.

'The refineries are still underperforming; unemploy-ment level is still high, poverty is still very pervasive, cost of fund is still high and access to credit remains an issue and corruption is still a big problem in the polity' he stated.

He said the chamber notes the recent introduction of non-interest banking and the controversy it has generated, and in their view, what is important in the circumstances is the due recognition of the peculiarities of the Nigerian environment and the inherent sensibilities.

'Policy documents on non-interest banking should avoid references to any particular religion or doctrine. The focus should be on the financial concepts, principles and the values it will give to those who choose to patronize it as a banking product.

'The reality of the Nigerian situation is that the cost of fund is one of the highest in the world and one of the major challenges in the Nigerian business environment is high lending rate.

'Therefore a banking product that will relieve borrowers the burden of interest payment will not be out of place' he said.

According to him, inflation is still high and taking its toll on operating costs for investors and the purchasing power of the citizens.

'According to the National Bureau of Statistics, inflation was 12.4 per cent in May a against 11.3 per cent in April 2011. The short term outlook is not quite good because of cost related variables in the economy such as the rising energy cost as well as the high deficit component of the budget' he said.