Poor access to credit by indigenous entrepreneurs is the leading reason why foreign investors are gradually taking over businesses in the country, the Lagos Chamber of Commerce and Industry has said.
The chamber, in its 2013 first quarter report made available to our correspondent on Tuesday, said the credit situation in Nigeria was a major problem for investors in the economy.
It stated, “We reiterate our call for both fiscal and monetary authorities to work together to ease the credit conditions, especially for the small and medium-scale enterprises, and more importantly, domestic businesses.
“This is critical as well to stem the gradual crowding out of domestic entrepreneurs by foreign investors.”
The report, which was signed by the President, LCCI, Mr. Goodie Ibru, stated that in the previous quarters, lending rates were well above 20 per cent, but that many small and medium-scale enterprises still had serious challenge in accessing credit even at the high rate.
The report further stated, “The tight credit situation is a major inhibiting factor to the capacity of domestic enterprises to take advantage of the robust Nigerian market. This position was corroborated by our Business Confidence Survey for the second quarter of this year.
“The credit challenge was identified as the factor with the biggest negative impact on business confidence.”
The report also appraised the country’s security situation, stating that it deteriorated in the first quarter of the year and that this impacted on investment risk and worsened the nation’s perception and image at the global level.
“Access to markets in the troubled parts of the country has reduced for many enterprises, and this is already affecting sales and profitability. Also, many enterprises have re-located with the inherent challenges,” LCCI said.
The chamber went further to condemn the lingering feud between members of the National Assembly and the Director-General, Securities and Exchange Commission, Ms. Arumah Oteh.