Lagos, April 18, 2023 – The Lagos Chamber of Commerce and Industry (LCCI) on Tuesday identified some advantages in the removal of petrol subsidy as being contemplated by the Federal Government.
Its President, Dr. Michael Olawale-Cole, said the removal of subsidy would be one of the best economic decisions to be taken by Nigerian government.
He was speaking at the chamber’s second-quarter State of the Economy Conference in Lagos.
He said that removal of petrol subsidy would also reduce Nigeria’s unsustainable debts and widespread corruption in that sector.
Olawale-Cole said the policy would spur investments in domestic refining and petrochemicals and create a significant value chain for the various stakeholders.
“The government must, however, take cognizance of its socio-economic implications, especially with unemployment at the unwholesome rate of about 40 percent.”
He also said that the planned removal of fuel subsidies might worsen the inflationary trend in the short-term.
Olawale also warned about the effects of borrowing to fund subsidies, saying that Federal Government’s fixation on debt accumulation was unhealthy.
He urged the Federal Government to explore other revenue sources avenues like opening up equity opportunities, offloading or selling of its real estate holdings, and tackling oil theft.
The LCCI also advised that FG to follow through with the recently launched and restructured Ministry of Finance Incorporated (MOFI) to optimize national assets and provide local and global observers a balanced picture of our financial position.
The chamber said that there was the need for the government to strengthen its support to critical sectors like agriculture, export infrastructure manufacturing, power and energy.
It also advised the Federal Government to look into ways to improve supply chains as well as cushioning the cost of production by assisting manufacturers with subsidized inputs and foreign exchange allocation. (GBN)
