BUSINESS outlook in Nigeria will remain tense in 2016 due to the declining trend of global oil price and its attendant impact on government revenue and foreign reserves, the Lagos Chamber of Commerce and Industry, LCCI, has said.
The implications on cost of and access to credit will be undesirable, while businesses, especially those with high forex exposure, will continue to face challenges of meeting foreign obligations to suppliers and partners, Director-General of the chamber, Mr. Muda Yussuf, said in his economic and business review in 2015 and perspective for 2016.
According to him, the development will also impact contractual trust and integrity,even as he said that risk of default in financial obligations in both public and private sectors will be high as macro-economic conditions and cash flow remain tight.
He said the insurance industry will remain largely underpenetrated with insurance density at about 0.225%.
“Therefore, significant change in this industry with respect to growth and penetration remains bleak even as the sector is still highly fragmented. The declining GDP is also expected to strain to a large extent, the performance of this industry’’, he stated.
He further said the nation’s non-oil export will increase in 2016 as a result of improved lending by Nigerian banks to boost Small and Medium Scale Enterprises and agriculture.
“The targeted N300 billion by the Nigerian banks to boost lending to Small and Medium Scale Enterprises (SMEs) and the agriculture sector in 2016 will boost SMEs development and employment and thus increases non-oil export.’’
According to him, the nation’s Gross Domestic Product growth is expected to rebound, though, slowly to about 3.5 in 2016,if the right mix of fiscal and monetary policies are put in place to stimulate the economy and attract domestic and foreign investments.
Yussuf said subsidy arrears payment and end of subsidy regime likely to result in improved market efficiency and profitability as downstream sector players explore pricing dynamics to boost investment.
He expressed that the expected deregulation in the downstream sub-sector will be a game changer.
He said other macroeconomic features for 2016 include clearer macroeconomic policy space, expansionary fiscal stance, huge debt profile, improved power supply and infrastructure, PIB acceleration and downstream deregulation and blockage of leakages by Treasury Single Account, TSA.

READ ALSO  BEDC, Elizade varsity sign MoU on human capacity development