The Lagos Chamber of Commerce and Industry (LCCI) has called on the federal government to strengthen incentives for Foreign Direct Investment (FDI) in the manufacturing sector, including stable tax and regulatory frameworks that reduce perceived risks, as part of measures to translate economic gains into broad-based, sustainable growth.
Reacting to the latest National Bureau of Statistics (NBS) data on inflation and capital importation, the LCCI disclosed that Nigeria’s economy urgently needs a deliberate strategy to attract and retain productive investment that drives jobs, industrial growth, and long-term competitiveness, noting that heavy reliance on short-term portfolio inflows is not sustainable.
The chamber stated that while the headline inflation eased for the fourth consecutive month and capital inflows rose significantly in Q1 2025, persisting structural weaknesses continue to weigh on the economy.
“Though inflation is moderating annually, food inflation remains elevated at 22.74 per cent year-on-year, with rural communities experiencing sharper monthly increases than urban centres.
“This persistent rise in food costs underscores the urgent need for targeted interventions in agriculture, rural infrastructure, and logistics efficiency to ease supply-side bottlenecks,” the LCCI stated.
On capital importation, the chamber noted that while Nigeria attracted $5.64 billion in Q1 2025, representing a 67 percent year-on-year increase and 11 percent quarter-on-quarter growth, the structure of inflows raises concern.
“Over 90 percent of total inflows were in portfolio investments, short-term funds chasing high yields in government securities. By contrast, Foreign Direct Investment (FDI) plunged to $126.29 million, down 70 per cent from the previous quarter, accounting for just 2.24 per cent of total inflows.
“This imbalance reveals that investors remain cautious about making long-term commitments to Nigeria’s real sector,” the chamber stated.
The LCCI described the continued decline in investment in manufacturing as worrying, noting that the sector attracted only $129.92 million in Q1 2025, a 32 percent drop from the same period in 2024.
They added that weak inflows into this critical sector reflect persistent challenges around forex liquidity, energy costs, job losses, and operating uncertainties, all of which have driven several multinationals to scale back or exit, and called on the federal government to rebuild domestic investor confidence, as local capital commitments often precede foreign inflows.
The LCCI also called on the federal government to deepen structural reforms to create a more efficient oil and gas sector that supports logistics costs, and a more structured and efficient power sector to increase electricity supply.
“We need policy interventions that support more productive economic activities, create sufficient supply, make goods available at the right places, create jobs, and let businesses thrive in an enabling business environment.
“The interventions should deal with energy cost, power supply, logistics, infrastructure deficits, business process bottlenecks around licensing and registration, access to credit, and FOREX liquidity through non-oil exports,” the LCCI stated.
The chamber further urged the federal government to consolidate macroeconomic stability, ensuring predictable exchange rate management and monetary policies, expand agricultural support to tackle food inflation, especially in rural areas with acute cost pressures, and reposition manufacturing and industry through targeted policies that attract capital into value-adding and job-creating sectors.
“The easing of headline inflation and the rise in capital inflows are encouraging signals. However, we must not lose sight of Nigerian households grappling with rising costs, and investors are hesitant to commit long-term capital,” the LCCI stated.
