LCCI: High inflation,major setback for manufacturers

By Oluwaseun ogunsola

The Lagos Chamber of Commerce and Industry (LCCI) has said that major factors causing setback is the high inflation rate of goods and services.

Urged the Federal Government to sustain a targeted Intervention in selected sectors in manufacturing while tackling insecurity.

LCCI President, Micheal Olawale -cole stated during the LCCI quarterly state of the economy press conference in Lagos.

He said, “Fuel subsidy removal would spur investments in domestic refining and Petro chemicals and create a significant value chain for the various state holders.

“Even though the planned removal of planned fuel subsidies may cause further accelerate inflation in the short term,it is arguably one of the best economic decisions to reduce our sustainable dept and widespread corruption in that sector.”

Also,the chamber is of the view that governments fixation on dept accumulation is unhealthy,hence the need to explore other avenues including opening equity opportunity and offloading/sales of its real estate holdings.

According to his statement, “the government should also make the problem if oil theft,with the removal of oil subsidy regime,a thing of the past to help create room for fiscal manipulation.”

The chamber said, government must take cognisance of socio-economic implications of fuel subsidy removal, especially with unemployment at an increased rate of 40 per cent.

LCCI said that the cost of logistics had gone up due to the poor state of roads and lack o connectivity amongst farms, factories and markets.

Also, to reduce the shocks from disruption to supply chains of raw materials, the chamber recommended that manufacturer be assisted with subsidised input and more allocations of forex for the importation of critical inputs.

The chamber said, “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.

“To achieve the laudable objectives of the 2023 budget, we urgent the government to sustain current efforts towards the realization of crude oil product and export targets by strengthening the investment -friendliness of oil and gas industry. Public -private partnership are the best models to fast- track the pace of our infrastructure development.”

He said that, with a N10.8trillion budget deficit projected in the 2023 budget, the country’s debt stock was expected to increase in 2023 and that the national dept may inch up to N77trillion by the end of the current administration in may if the CBN’s ways and means of N23.7trillion is securitized and if the current level of borrowing is sustain.

He added, “the government should also make the problem of oil theft with the removal of oil subsidy regime, a thing of the past to help create room for fiscal manipulation.”