Lagos Chamber of Commerce and Industry (LCCI) has said Southwest is most suitable for doing business in Nigeria.
According to a statement from ‘The Nigerian Business Confidence Index (BCI),” LCCI said: “The confidence level of businesses located in the Southwest inched to a new high of 44 per cent from 38 per cent and 30 per cent in Q2 and Q1.
“This is followed by companies operating in the Southeast and South-south, with BCI score of 31 per cent and 21 per cent respectively.”
The report said the confidence level of businesses in the North central, which dropped to zero in Q2 improved dramatically with BCI score of 11 per cent. “Northeast and Northwest continue to trail between the negative and neutral confidence trajectories. We look to see how far the on-going security operation in some Northern states will impact business confidence in our Q4-2013 BCI survey,” it stated.
LCCI said the third quarter 2013 aggregate BCI sustained a positive improvement of 24 per cent from the 16.5 per cent and 10.5per cent it achieved in Q2 and Q1. This represents 13.5 per cent point movement of the index along a positive trajectory since the beginning of this year.
The steady and significant improvement of the BCI, according to the report, suggests that business leaders are gearing towards expanding their investments and plant size in the months to come.
He said apart from the recurrent factors such as poor access to credit, security situation and the dwindling public power supply, the index posted impressive confidence across most business and economic indicators.
He also said that budget implementation and Federal Government’s security intervention in some parts of the North, impressive corporate results and the modest trends of exchange and inflation rate tend to have supported the record rise of business confidence in that section of country.
The Director General of Lagos Chamber of Commerce, Muda Yusuf, said for the first time, the financial sector recorded the highest confidence of 35 per cent closely followed by Hotel & Restaurant and Telecoms & Postal sectors 29 per cent and 27 per cent confidence levels respectively.
He also said for the first time the agricultural sector was impressive at 18 per cent but the manufacturing sector remains disappointing at 5 per cent business confidence level.
According to him, this implies that expansion and new investment in the Nigerian manufacturing sector remains largely held down by the lingering challenges confronting business environment in the country.
In their conclusion they said the 3rd quarter 2013 aggregate Business Confidence Index (BCI) sustained a significant positive improvement supported by the take-off of budget implementation across the country. He listed other positive improvements to include on-going security intervention in some parts of the North, impressive corporate results in most sectors and stable macroeconomic prices exchange and inflation rate.
He said the improvement suggests that business leaders are likely going to expand their investments in the months. He however, noted that some investors are still wary about the state of the economy in the medium term because the lingering limiting factors that are yet to be addressed.
BCI is a leading economic indicator designed to measure the degree of optimism on the state of the economy that business leaders are expressing through their activities of investing and spending.
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.
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