The Lagos Chamber of Commerce and Industry (LCCI) has urged government to continue with its non-oil campaigns to sustain the country’s economic growth performance.
The National Bureau of Statistics (NBS) announced that Nigeria’s Gross Domestic Product (GDP) grew in 2022 second quarter (Q2) by 3.54 per cent year-on-year in real terms. This is the seventh quarter of positive growth.
The director-general of LCCI, Dr. Chinyere Almona, said the Nigerian economy has recorded impressive recovery from the recession induced by the COVID-19 pandemic in 2020, saying that the economy has consistently recorded growth rates breaking many analysts’ predictions of expected lower growth rates.
“However, the economy has continued to struggle with many inhibiting burdens like inflation, weak revenue generation, degenerated infrastructure, forex challenges, unsustainable cost profile seen in debt services and subsidy payments, and the daunting threats of worsening insecurity. The Chamber is concerned that if we continue in this trajectory, the economy may bleed away into a stagflation which will impact on production cost, job losses, worsened forex crisis, and dampened growth in the medium term,” she noted.
She added that, “the oil sector has consistently recorded negative growth for the ninth consecutive quarter, contracting again by 11.8 per cent year-on-year in Q2 2022 following a higher contraction of 26 per cent 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 sterner approach.”
Almona pointed out that the non-oil sector grew by 4.8 per cent in Q2 2022 against 6.1 per cent in Q1 2022, urging 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.
According to her, the growth of 1.2 per cent recorded for agriculture and the three per cent for manufacturing are comparatively low when compared with other sectors that grew at above five per cent.
“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.
“The federal government needs to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, export infrastructure, tackling insecurity, and free more money from subsidy payments. It is also worrisome that the 2023 budget estimations indicate that there may not be any significant allocation to capital projects in 2023.
“We urge the government to tackle oil theft 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,” she pointed out.
