The Lagos Chambers of Commerce and Industry (LCCI) has reiterated its concerns about Nigeria’s debt costs, advising that the country needs to re-assess her debt sources to borrow at lower rates, as well as embrace more non-tax revenue sources.
LCCI President and Chairman of Council, Asiwaju (Dr.) Michael Olawale-Cole, expressed the concerns at the Chamber’s 2023 economic review and budget analysis session
Asiwaju Olawale-Cole recalled that the revenue and capital expenditure performance of the 2022 budget indicated the fiscal resilience of the Nigerian economy, stressing that this should be consolidated for better outcomes in the 2023 fiscal year.
“A higher non-oil revenue projection in comparison to oil revenue, if effectively implemented and actualized, will minimize the impact of external shocks on our revenues.
The Nigerian economy in 2022 recorded growth in the first three quarters but slowed down from 3.54% in q2 to 2.25% in q3. We expect to have a growth report for the last quarter of 2022. The slowdown was driven by a decline in aggregate demand in the face of inflation spikes, commodities’ supply chain disruption, high energy costs, and forex scarcity. In 2023, we expect to see growth in sectors like manufacturing, agriculture, transport, telecommunications, and trade.
“The essence of hosting this economic outlook and budget analysis session is to facilitate conversations and share perspectives from diverse sectors of the economy on the details of the budget and what they mean for business in 2023. Additionally, this session aims to enlighten stakeholders, corporate and business executives on how the budget will likely impact sectors and industries of the economy, and how they can explore the opportunities for profitability and sustainability” LCCI President asserted.
LCCI observed that with the 2023 Federal Government budget tagged “budget of fiscal consolidation and transition,” the federal government plans to spend the sum of N21.83 trillion in 2023, an increase of N1.32 trillion over the initial executive proposal for a total expenditure of N20.51 trillion and from the sum of N17.13 trillion in 2022.
The President added: “This budget size reaffirms the commitment of the government to pursuing an expansionary fiscal policy to stabilize growth and deepen the diversification of the Nigerian economy.
The overall budget deficit at N11.34 trillion for 2023 represents 5.03% of GDP. The budget deficit is to be financed mainly by borrowings made up of domestic sources of N7.04tn, foreign sources of N1.76trillion, multi-lateral/bi-lateral loan drawdowns of N1.77billion, and privatization proceeds: N206.18 billion”.
Renowned economists including: Ben Akabueze, Dr Biodun Adedipe, and Taiwo Oyedele graced the session, with Dr Ayo Teriba, moderating.