The Lagos Chamber of Commerce and Industry (LCCI) said it is worried about the monopoly of the Nigerian National Petroleum Company Limited (NNPC) in the importation and supply of petroleum products.
The chamber in a remark following the World Bank’s Nigeria Development Update (NDU) themed: “Turning the Corner, From Reforms and Renewed Hope to Results” launched on Wednesday is also worried by the lack of transparency in the pricing of the products.
The Director General of the chamber, Chinyere Almona, noted the Bank’s concerns about the Nigerian economy despite the reforms carried out so far including fuel subsidy removal, liberalization of the foreign exchange market, the removal of 43 items from FX restrictions and tightening of monetary policy, said 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.
The chamber shared a similar view with the World Bank on the capacity and underperformance of the NNPC and other Government-Owned Enterprises (GOEs).
Supporting the World Bank on the partial return of subsidy, the Chamber emphasised the need to adjust petrol prices to reflect market conditions and full deregulation of petroleum products which the Chamber, over the years, has consistently advocated for.
” 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.”
To increase government revenue, therefore, the chamber 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 enterprises, including privatization 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.
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 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 to reduce the huge demand for FX.
“Further, there is a need to build market confidence around free FX pricing and implement policies to channel FX supply into the market.
“The LCCI notes with concern, as highlighted by the World Bank, the continued uptick in inflation and its severe impact on businesses, consumers’ income, spending & 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, that there is 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.”
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