The Lagos Chamber of Commerce and Industry (LCCI), one of the leading organized private sector (OPS) groups in Nigeria, has charged the President Bola Tinubu-led administration to adopt prudent fiscal measures to spur the nation’s economic growth in view of the slowdown recorded in the second quarter of this year.
The Chamber’s Director-General, Dr. Chinyere Almona, in a statement noted that the latest report by the National Bureau of Statistics (NBS) indicated the Nigerian economy grew by 2.51% in the second quarter compared to 2.31% in the first quarter of 2023, representing 11th consecutive quarter of growth, though lower than the 3.54% recorded in the same quarter of 2022.
She stated that the slowdown may be attributed to the challenging economic conditions caused by fuel subsidy removal and exchange rate harmonization.
The economic analyst, who critically appraised the sectorial performances of the key sectors, which reflected that growth was primarily driven by the service sector at 4.42% and contributed 58.42% to aggregate GDP, observed that the recession in the oil sector persisted with a higher contraction of –13.43% in the quarter compared to –4.21% in the previous quarter.
While noting that the significant decline in the oil sector reflects sub-optimal daily oil production due to a lack of accountability, oil theft, pipeline vandalism, under-investment, and rising cost of production, Almona also noted that he non-oil sector grew by 3.58%, a slight expansion of 0.81% points compared to 2.77% in Q1 2023 and lower by 1.19% points compared to Q2 2022.
The Director-General further expressed the LCCI’s position on the significant contraction recorded in transport & storage and the sub-optimal growth in manufacturing and trade largely reflect the deregulation of the downstream oil sector, exchange rate volatility, and weak consumer demand, adding that the recovery in agriculture is significant, however, growth remained low and may be attributed to insecurity and policy gaps.
On the desirable ways for the government to improve the performance of the economy, Almona canvassed: “The Chamber recommends that the government adopt more prudent fiscal policy measures to effectively manage inflation and address the issue of high-interest rate and exchange rate volatility.
“We commend the Federal Government’s declaration of a state of emergency on food security and urge them to prioritize farmers’ areas of assistance, fertilizers, and seeds to mitigate the effects of subsidy removal and create strategic food reserves to be used as price stabilization mechanisms”, she added.
