Confidence index shed 7.7 per cent in first quarter – LCCI | Independent Newspapers Limited
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Confidence index shed 7.7 per cent in first quarter – LCCI

Posted: Apr 1, 2015 at 3:17 am   /   by   /   comments (0)
.Muda Yusuf

.Muda Yusuf

By Sylvester Enoghase

Team Editor, Economy


The Lagos Chamber of Commerce and Industry (LCCI) on Tuesday reiterated that business managers and investors in the country have over the last few months faced heightened anxiety and commercial risks associated with the uncertainty surrounding the 2015 general elections

The LCCI’s Director General, Muda Yusuf made the declaration while reviewing the 1st quarter 2015 aggregate Business Confidence Index (BCI) recently released by the Chamber in Lagos.

He said: “The 1st quarter of 2015 aggregate BCI drops from 30  to 22.3 per cent. This represents 7.7 per cent point slack of the confidence level among business operators over the last three months. This is the largest quarter on quarter point drop of the BCI score over the last three years.”

According to Yusuf, the movement of the BCI score by up to five points indicates the presence of significant positive or adverse development in the country’s economic/business environment.

“The drop of the BCI scores at this time suggests that business leaders are largely pessimistic about expanding their business and investment spending over the next few months,” he said.

The LCCI Director General, who argued that the factors that mostly lowered the confidence level of business leaders over the last few months is unpredictable political developments that has engendered uncertainty among economic agents, cautioned the Federal Government to be mindful of current investment decisions across the economy that have become very fragile leading to less than optimal operations and delay tactics by companies pending when things will start to normalise.

He noted that the depressed crude oil price in the international market and the volatile exchange rate resulted to the significant depreciation of the local currency.

Yusuf, who stated that BCI, is a leading economic indicator designed to measure the degree of optimism on the state of the economy said the decreasing business confidence is often a pointer to slowing economic activities “because business owners are likely to decrease their investment.

“The more confident entrepreneurs and managers feel about the business environment, the more likely they are to make new investments, create job and impact the economy.”

He noted that operators in the oil and gas industry are mostly disturbed by the uncertainty surrounding delayed passage of the PIB coupled with the adverse developments in the global oil and gas market.