A Review of the Nigerian Energy Industry

Business confidence index drops 6.4% in Q4 – LCCI

Lagos-traffic16 October 2013, Lagos – The Lagos Chamber of Commerce and Industry, LCCI, has disclosed that the Business Confidence Level Index, BCI, dropped in the last quarter of 2013.

The survey conducted by the LCCI revealed that the 4th quarter 2013 aggregate BCI moderated to 17.6 per cent from 24 percent it posted in the third quarter. This represents 6.4 percent point drop of the index over quarter Q3 , 2013.

The LCCI revealed that the manufacturing sector remained the most troubled sector as evidenced by the negative confidence of the industry operators, stressing that the most disturbing factors was the influx of imported and substandard products, poor access to credit, high cost of doing business and inhibitive activities of government regulatory/monitoring agencies.

According to LCCI, “ The ongoing systemic challenge in the Discount Houses, the prolonged consideration of the Petroleum Industry Bill (PIB) and the newly introduced 50 percent Cash Reserved Ratio (CRR) on public sector deposits by CBN may have triggered some level of uncertainty in the finance and oil & gas sectors.”

The LCCI also suggested that expansion and new investment in most sectors/regions of the Nigerian economy may be soft in the months to come. “Notwithstanding, the final take-over of the nation’s power companies by the new private owners is a succor to our yearnings for improved power supply. We look to see how the end of year festivities, increase political activities and sustained tightening by the monetary authorities will impact business confidence in Q1-2014” it added.

On sectoral performance, the survey revealed that all the sectors except manufacturing reported positive but weak business confidence levels. “We are mostly worried by the negative (-2per cent) confidence level reported by operators in the manufacturing sector at this time. Over the last one year, the manufacturing sector has consistently remained at the bottom of BCI league table by trending between negative and neutral confidence levels. The most disturbing factor for manufacturers includes: the influx of imported and substandard products, poor access to credit, high cost of doing business and inhibitive activities of government regulatory/monitoring agencies” LCCI stated.

On the finance sector, the LCCI survey revealed that, “Finance sector reported the largest drop of 20 points from 35 per cent in Q3-2013 to 15 per cent in Q4-2013. This drop is quite significant and a call for concern for a sector that just reported record profit and impressive performance”
*Peter Egwuatu, Vanguard

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