Lagos Chamber of Commerce and Industry (LCCI), one of Nigeria’s leading organized private sector (OPS) advocacy groups, on Tuesday set some key priorities for the Federal Government to concentrate on to achieve the objectives of its ongoing economic recovery agenda and by so doing, improve the socioeconomic well being of the citizenry.
The OPS group, in its ‘Statement on Nigeria’s Economic Growth Performance’ signed by the Director General, Dr. Chinyere Almona, noted that the economy had since post-Covid 19 pandemic era consistently recorded growth rates that surpassed many analysts’ predictions.
The LCCI pointed out, however, that the economy continued to struggle with many inhibiting constraints like inflation, weak revenue generation, degenerated infrastructure, forex challenges, unsustainable cost profile seen in debt services and subsidy payments, and the daunting threats of worsening insecurity.
It expressed serious concern that a continuation of these ugly developments may cause economic stagnation with the attendant negative implications for production cost, job losses, worsened forex crisis, and dampened growth in the medium term.
Reflecting on the latest GDP report by the National Bureau of Statistics (NBS), which indicated that the economy grew in Q2 2022 by 3.54% year-on-year in real terms, the OPS group maintained that while the latest growth figures were commendable, there are some threats to future growth that need special attention.
For instance, it observed that the oil sector had consistently recorded negative growth for the ninth consecutive quarter, contracting again by -11.8% y/y in Q2 2022 following a higher contraction of -26% y/y in Q1, adding that if oil revenue makes up more than 80 percent of government revenue, then there is an urgent need for the government to tackle the menace of oil theft and pipeline vandalism with sterner approach.
Also, on the non-oil sector’s performance which grew by 4.8% y/y in Q2 ’22 against 6.1% y/y in Q1 ’22 with the key drivers as transportation and storage, finance and insurance, telecommunications, trade, real estate, construction, manufacturing, and agriculture, the chamber tasked the government to continue with the non-oil campaigns and interventions to sustain the targeted financing towards boosting non-oil export for enhanced foreign exchange earnings.
The LCCI further pointed out that the growth of 1.2% recorded for agriculture and the 3% for manufacturing were comparatively low when compared with other sectors that grew at above 5% and attributed the woes in the two sectors as responsible for the frightening rise in the nation’s surging inflation rate.
The chamber cautioned that with the excruciating burden from debt service, subsidy payments, and worsening insecurity, many more production activities may be constrained in the coming months.
On the way forward, the OPS group advised the government to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, export infrastructure, tackling insecurity, and free more money from subsidy payments.
While also expressing concerns that the 2023 budget estimations indicated that there may not be any significant allocation to capital projects in the fiscal year, it charged the government to frontally tackle oil theft menace to earn more foreign exchange, borrow from cheaper sources to reduce the burden of debt servicing, and take a decisive step towards removing fuel subsidies.
