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The Lagos Chamber of Commerce and Industry (LCCI) has called for urgent reorganisation and improved transparency in the Nigerian National Petroleum Company Limited (NNPCL) and the Central Bank of Nigeria (CBN) saying that the operating environment of both organsiations is opaque.
The LCCI issued a communique on Tuesday after its Mid-Year Economic Review and Outlook held on Monday in collaboration with Codros Capital.
In the communique signed by the Chamber’s Director-General, Dr. Chinyere Almona, LCCI urged the Federal Government of Nigeria to focus more on asset-bearing offerings to increase revenue.
The Chamber said: “Government should consider the urgent need for an all-encompassing economic and fiscal plan, full/ partial divestment of state-owned real estate, improved transport sector, and energy assets as post-election priorities.
“The government must focus more on asset-based and equity offerings to improve revenue. Institutional reorganization is urgently needed in the CBN and the NNPC to improve transparency and accountability.The operating environment of NNPCL is somewhat opaque, which is anti-competition. The oil sector will attract the desired investment if the government liberalizes fuel import licenses and other vital activities in the midstream and downstream.
“Government should unlock revenue from assets by complementing tax with rent, fees, dividends, and capital gains. Economies that optimize revenue through equities have recently offset the loss from declining commodity prices.”
LCCI President, Michael Olawale-Cole
Noting that the country’s economy in the first half of 2023 was quite challenging due to multiple factors, the body advised the President Bola Tinubu-led new administration to borrow better to reduce debt costs by issuing a more asset-linked debt than IOUs.
“The non-interest-bearing debt opportunities should be explored as emerging markets tilt towards project equity financing,” it added.
LCCI concluded the communique by recommending that BDCs should not be referred to as parallel or unofficial markets, because they are officially licensed to trade.
During the meeting, LCCI President, Asiwaju, Dr. Michael Olawale-Cole, in his opening remark, indicated that the half-yearly event reviewed vital policy developments and macroeconomic performance. The Chamber discussed the outlook and expectations for the next half, focusing on risks and opportunities.
The forum observed that the Nigerian economy in the first half of 2023 was quite challenging due to multiple factors. It noted that business conditions and operating environment in the first half of the year were essentially difficult due to rising interest rates, inflationary pressures, foreign exchange volatility, and the liberalization of the downstream sector of the oil & gas industry. As a result, the cost of living has significantly gone up. The first quarter GDP slowed to 2.31%, primarily driven by growth in the non-oil sector while the oil sector remained in recession.
“The country also witnessed a significant decline in foreign direct investments (FDIs), coupled with a high level of public debt stock and concerns for debt sustainability, high unemployment, and poverty levels. The International Monetary Fund (IMF), in its July 2023 World Economic Outlook (WEO) Update, lowered its growth projection for Nigeria in 2023 to 3.2% from 3.3% in 2022, reflecting security issues in the oil sector, policy risks, and persistently high inflation.” LCCI stated.
