The Lagos Chamber of Commerce and Industry (LCCI) has stated that Nigeria is the only major oil exporter that hasn’t benefited from the windfall of higher global oil prices.
This was disclosed by Dr Michael Olawale-Cole, President of LCCI in a statement, according to the News Agency of Nigeria.
He added that the recent depreciation of the naira indicated an exchange rate risk likely to put pressure on inflation and its associated implications due to the substantial component of Eurobonds in the foreign debt.
What LCCI is saying
He said, “Nigeria is the only major oil exporter that hasn’t benefited from the windfall of higher global oil prices.”
- “The Chamber has consistently advised the government to borrow from cheaper sources and consider deficit financing from equity instead of the expensive debts borrowed and used for recurrent expenditures. The commercialisation model proposed for NNPC Limited is the right direction to go,” he added.
- The LCCI also stated that “Once this plan succeeds next year, it should be replicated with other national corporate assets scattered across the country. Nigeria must manage its debt burden to avoid further pressure on revenue.”
- He added that it was crucial to increase spending on supporting productive infrastructure rather than using borrowed funds to subsidize consumption.
- To reduce Nigeria’s debt load, LCCI encouraged the Federal Government to boost the country’s earnings and borrow from less expensive sources.
He pointed out that the total projected spending for 2022 was N17.32 trillion; by the end of April, N5.77 trillion in income was anticipated, but only N1.63 trillion was realized as retained money by the government. In the same period, the government spent N4.72 trillion, of which N1.26 trillion went toward human costs and N1.24 trillion toward debt servicing, leaving just N773.63 billion for capital expenditures.
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