Lagos Chamber of Commerce and Industry (LCCI), yesterday, threw its weight behind the recent World Bank report, which berated the opacity and underperformance of the Nigerian National Petroleum Corporation (NNPC) and other Government-Owned Enterprises (GOEs).

The World Bank’s Nigeria Development Update (NDU), themed, “Turning the Corner, From Reforms and Renewed Hope to Results” was launched on December 13, 2023.

Speaking on the report, LCCI Director-General, Dr Chinyere Almona, noted the bank’s concerns about Nigeria’s economy despite the reforms carried out so far including fuel subsidy removal, liberalisation of the foreign exchange market, removal of 43 items from FX restrictions and tightening of monetary policy.
“A detailed review of the report revealed that the key concerns in the Nigerian economy remain 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,” she said.

“To increase government revenue, we advocate 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. However, we do not support the immediate increase in value-added tax (VAT) due to its cost impact on consumers in the immediate term.”

On the partial return of subsidy, Almona said they support the views of the World Bank and the need to adjust petrol prices to reflect market conditions. She added that over the years, they have consistently advocated for full and transparent deregulation of petroleum products. She, however, expressed worry over the monopoly in the importation and supply of petroleum products by the NNPC and the lack of transparency in the pricing of the products.”

“In relation to the unstable FX market, the Chamber recommended that the government, in the short term, must address the supply gap in the market and improve its FX earnings by declaring an emergency in oil and gas production.”

“In the medium term, the government must strategically pursue and incentivise 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.”

She also noted with concern, as highlighted by the World Bank and the recent Nigerian Bureau of Statistics (NBS) report, the continued uptick in inflation and its severe impact on businesses, consumers’ income, spending and saving as well as manufacturing productivity in the country.

“We urge the CBN to intensify its efforts to address the challenge by adopting the right policy mix and ensuring synergy with fiscal authorities. The Chamber recommends, in the short run, the 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,” the DG concluded.