The Lagos Chamber of Commerce and Industry said it has noted the World Bank’s concerns about the Nigerian economy update, despite the fact that many of her reforms agenda are still underway.
This was contained in a press release, signed by the Chamber’s Director General, Dr. Chinyere Almona, on Friday.
LCCI’s comment followed World Bank’s unveiling of Nigeria Development Update, themed: “Turning the Corner, From Reforms and Renewed Hope to Results.”
It was launched on December 13, 2023.
Almona listed the reforms carried out so far to include: fuel subsidy removal, liberalisation of the foreign exchange market, removal of 43 items from FX restrictions and tightening of monetary policy.
Following the launched NDU, LCCI recommended that in the short run, there was a need for the government to focus on the critical needs of the poor and ensure regenerative investments in priority sectors of the economy, including agriculture, transport, health, youth development and human capital, infrastructure and housing.
Almona pointed out that a detailed review of the report revealed that the key concerns in the Nigerian economy are high inflation, revenue leakages, unstable FX market due to liquidity challenges, increased poverty due to the high cost of living, partial return of subsidy, and sub-optimal GDP growth.
Almona stressed: “We share similar views with the World Bank on the opacity and underperformance of the Nigerian National Petroleum Corporation (NNPC) and other Government-Owned Enterprises (GOEs)”.
To increase government revenue, LCCI advocated for far-reaching reforms and commitment on the part of the government to improve transparency and a comprehensive strategy that will improve the performance of the enterprises, including privatisation options.
Still, the Chamber said it did not support the immediate increase in value-added tax (VAT) due to its cost impact on consumers in the immediate term.
The statement reads in part: “On the partial return of subsidy, the Chamber supports the views of the World Bank and the need to adjust petrol prices to reflect market conditions.
“Over the years, the Chamber has consistently advocated for the full deregulation of petroleum products. We are, however, worried about the monopoly in the importation and supply of the products by NNPC and the lack of transparency in the pricing of the products.
“In relation to the unstable FX market, the Chamber recommends that the government, in the short term, must address the supply gap in the market and improve its forex earnings by declaring an emergency in oil & gas production.
“In the medium term, the government must strategically pursue and incentivize the local production of basic household needs that are being heavily imported in order to reduce the huge demand of FX. Further, there is a need to build market confidence around free FX pricing and implement policies to channel FX supply into the market”.
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LCCI noted with concern, as highlighted by the World Bank, the continued uptick in inflation and its severe impact on businesses, consumers’ income, spending and saving, as well as manufacturing productivity in the country.
It therefore urged the Central Bank of CBN to intensify its efforts to address the challenge by adopting the right policy mix and ensuring synergy with fiscal authorities.
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