The Lagos Chamber of Commerce and Industry (LCCI) has identified transparency in the management of public finance, institutionalizing the rule of law, citizen engagement, practice of true Federalism, among others as core democratic values and ideals needed to be given more State’s attention.
LCCI Director General, Dr. Chinyere Almona made this assertion in the Chamber’s 62nd Independent Anniversary message.
The Chamber noted that Nigerian democracy is still a work in progress, saying as in many advanced democracies, it is crucial to recognize the importance of the highlighted democratic ideals to sustain our democracy and ensure the advancement of the common good for all citizens.
LCCI DG recalled that as country battles with the challenge of terrorism, the situation was recently compounded with other insecurity hindrances such as: border clashes, herdsmen/farmers clashes, banditry, kidnapping, and social unrest, noting that these were not pleasant signals as the country prepares for the general elections next year.
The Chamber therefore called on the Federal Government FG to ensure a free and fair exercise solely driven by sound electoral laws and governance.
Speaking on economy, Dr Almona indicated that the economic growth trend, measured by the Gross Domestic Product (GDP) performance, has generally been positive over the last two decades, except for recent challenges posed by debt crises, inflation risks, insecurity, and FOREX illiquidity.
“There is an urgent need to address the weak government revenue base caused by oil theft and pipeline vandalism, rising and unsustainable debt profile, over-dependence on oil revenue, exposure to foreign shocks through inadequate forex supply, double-digit inflation”, LCCI asserted.
Still on economy, LCCI scored telecommunication high, positing that the growth of the sector stands out as one of the most resilient sectors in the last year.
“Many sectors have leveraged telecom’s innovative possibilities to make significant progress through ICT, especially in the services sector. Today, we have tech-enabled platforms supporting healthcare delivery, agriculture, education, transport, etc. The Government should commit to supporting this sector’s growth and strive to create an enabling regulatory environment.
“The financial services sector has been significantly transformed since independence through leveraging technology to enhance service delivery. The sophistication of the industry can compare with its counterparts even in advanced economies. However, the financial intermediation role of the banking system is still below expectation. It still has some weak linkages with many other sectors of the economy, which has constrained the sector’s impact on the economy from a systemic perspective.
“The quality of the business environment remains a concern to investors, especially in the real sector. Weak infrastructure, uncertain policy environment, and institutions have continued to adversely affect the efficiency, productivity, and competitiveness of many enterprises in the economy. These conditions pose a major risk to job creation and economic inclusion across sectors.
“The Gross Domestic Product (GDP) grew in 2022Q2 by 3.54% year-on-year in real terms, making it the seventh quarter of positive growth. The oil sector has 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. If oil revenue makes up more than 80 percent of government revenue, we expect the Government to tackle the menace of oil theft and pipeline vandalism with a sterner approach.
“The non-oil sector grew by 4.8% y/y in Q2 ’22 against 6.1% y/y in Q1 ’22. Key drivers within the non-oil economy include transportation and storage (51.7% y/y), finance and insurance (18.5% y/y), telecommunications (7.7% y/y), trade (4.5% y/y), real estate (4.4% y/y), construction (4.0% y/y), manufacturing (3% y/y), and agriculture (1.2% y/y). Combined, these sectors accounted for 78.3% of total GDP in Q2. We urge 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 growth of 1.2% recorded for agriculture and the 3% for manufacturing are comparatively low when compared with other sectors that grew at above 5%. This is also indicative of the threats facing these sectors that power Nigeria’s real sector. The woes in these two sectors are responsible for the frightening rise in our inflation rate. And with the excruciating burden from debt service, subsidy payments, and worsening insecurity, many more production activities may be constrained in the coming months” LCCI DG established.
Following these, LCCI stressed the need for FG to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, export infrastructure, tackling insecurity, and free up more money from subsidy payments.
The Chamber also urged the Government to tackle oil theft so as 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.