By Merit Ibe
Beyond the figures and policy statements contained in the 2023 Federal Government budget, the Lagos Chamber of Commerce and Industry (LCCI) has projected that the high inflation rate will distort most of the budget assumptions and targets if not curtailed.
LCCI therefore recommended that governments at all levels must put actionable policies in place to address the high fuel and food costs, noting that particular attention must be put on investing more in transport infrastructure to resolve the many logistics challenges that have impacted the movement of goods across the nation.
President of LCCI, Dr. Michael Olawale-Cole, made the statement at the fourth quarterly press conference on the state of the nation, where he applauded the strategic objective of the expenditure policy in the budget, which focuses on macroeconomic stability, human development, food security, improved business environment, energy sufficiency, improving transport infrastructure and promoting industrialisation by focusing on small and medium scale enterprises.
He however, suggested that the performance of the 2023 budget could be improved upon by studying how the 2022 budget has performed; looking at what has worked well, what failed and what must be corrected in the implementation of the 2023 budget.
“We need to invest more in infrastructure and critical port reforms to reduce the bottlenecks in our export logistics and processes that will boost non-oil production and exports. Looking beyond oil revenues, the country’s forex earnings can be enhanced through increased inflow of foreign direct investments (FDIs).
“In addressing the most significant components of human development, we urge governments at all levels to remain consistent in funding education, health, infrastructure and security. One-off funding cannot address the decay in these areas within a year and it must be a practice and tradition to seek robust equity funding for these areas consistently.
“It is obvious that we may not even be able to source debts from foreign investors as in the past. Many factors have diminished our debt ratings, which should push the government to consider immediate issuance of wholesale equity investment at home and abroad to fund idle assets to finance the deficits instead of borrowing more,” Olawale-Cole said.
“We must immediately plug revenue leakages by curbing oil theft, pipeline vandalisation, trimming excessive fuel, power, gas, forex subsidies and massive tax and duty waivers to lift revenue.”
The LCCI boss noted that the chamber is particularly concerned about the revelation of some institutions that the lives and livelihoods of 345 million people are in immediate danger from acute food insecurity, adding that persistent shocks due to the pandemic and the Russia-Ukraine war have driven food insecurity in sub-saharan Africa by at least 30 percent to 123 million in 2022.
He proffered that sustaining the pace of recovery in 2022 and navigating through the growing uncertainties in the global economy requires well-coordinated fiscal and monetary policies in promoting growth-enhancing and confidence-building policies that would encourage private and foreign capital inflows into the economy.”
“Fuel subsidies should be removed and oil theft curtailed, if not eliminated, to provide fiscal space for subsidised production of goods and services and infrastructure, health, and education financing.
while the central bank of Nigeria (CBN) embarks on monetary tightening to tame inflation, it should ensure that targeted concessionary credit to the private sector is sustained for MSMEs.
“The CBN needs to gradually transition to a unified exchange rate system and allow for a market-reflective exchange rate. The CBN also needs to roll out more friendly supply-side policies to boost productive sectors, bolster investor confidence and help attract foreign investment inflows into the economy.
“As a matter of urgency, the government must tackle the flood menace in the country by implementing environmental guidelines and establishing preventive infrastructure. The impact of climate change on agriculture is becoming more evident by the day and quick response is critical to avert food insecurity and worsening food inflation.”