'There is Total Collapse of Confidence in Economy'

 'There is Total Collapse of Confidence in Economy'

Lagos Chambers of Commerce and Industry, LCCI, yesterday lamented what it described as the "total collapse" of the country's economy.

The Director-General of the Chambers, Mr. Muda Yusuf, said: "If there is no confidence in your economy and your currency, then there will be capital flight.

"If there is no liquidity of the forex market, the volume of forex inflow will be low. If portfolio investors and foreign direct investors do not have confidence that they can seamlessly repatriate the forex they brought in without losing value, then they will hold back their investments."

Commenting further on the current economic crisis facing the country especially the forex crunch, Yusuf said the crisis would certainly take its toll on all products in the market whether made locally or imported.

Also it was revealed that the Nigerian economic crisis was spiraling out of control, with the ordinary man on the street now feeling the pinch more than ever before.

The prices of basic food items and other consumables are now shooting beyond their reach.

The LCCI DG noted that the more of importation component a product contains, the more it will be affected by the foreign exchange crisis.

"There is a connection. Once there is a wave of price increases, it affects all other products and commodities. The woman who sells garri will have to raise the price of her locally produced garri to be able to buy other things that she needs which may be imported; so the prices of other things will certainly go up," Yusuf said.

He pointed out that the crisis was the result of a total collapse of confidence in the nation's economy and its currency.

"There is urgent need for a flexible exchange rate regime to manage the slide. One market cannot be exchanging at N197 to a dollar while the other is exchanging at N400 to a dollar within the same economy. You can't run an economy that way. We must liberalise the flow of forex in and out of the economy," Yusuf stressed.

In a related development, the market survey conducted by a prominent media house in Nigeria

across various markets in the country yesterday revealed price increases of between 30 and 50 per cent for various items.

According to the survey findings, the price of a bag of sachet (pure) water which contains 20 sachets rose between 50 and 100 per cent from N100 to N200, raising the budget of the common man for potable water significantly.

In Owerri, price of pure water rose from N5 to N15 per sachet.

Other items surveyed included rice which witnessed a 20 per cent price increase from N10,000 per 50 kg bag to N12,000.

The price of the nation's most popular source of carbohydrate, garri, also took a leap upwards, rising from N300 per measuring unit (empty paint container) to between N350 to N400.

A unit of vegetable oil, which is a 20-litter gallon, recorded a significant increase in price from N6,500 to N9,500, rising by around 30 per cent.