The President of the Lagos Chamber of Commerce and Industry (LCCI), Mr Goodie Ibru, has expressed concern over the delay in signing of the budget, saying it could be detrimental to the economy.
He expressed the concern in Lagos while briefing newsmen on the performance of the economy in the first quarter of 2012. He said that the 2012 budget was only passed on March 15 and that it had yet to be signed by the president.
According to him, the delay has a number of implications for the economy which include, among others, further depression in the construction industry.
“This delay has a number of implications for the economy. The public sector is a major driver of economic activities by virtue of the configuration of the economy and resource allocation. Therefore, when the fiscal activity of the government is slowed down, it has a dampening effect on the general cash flow in the economy.
“Capital projects would suffer the risk of poor implementation. This will further take its toll on infrastructure development in the economy. The construction industry which is driven principally by public sector expenditure may be further depressed. Payment of many contractors is dependent on the conclusion of the budget process. The Lagos Chamber of Commerce and Industry is concerned that budget delays have become a recurring phenomenon in the country.”
According to Ibru, unbearable energy cost is putting undue pressure on the manufacturing sector. He argued that if the trend was not reversed, the industrial sector could collapse in a few years.
“The manufacturing sector is still groaning under the pressure of huge and unbearable energy cost. Most firms now rely entirely on their power generator for production. The cost is horrendous, diesel cost ranging between N150 and N160 per litre.
“This is added to the problem of dwindling sales, weak consumer demand, high cost of fund, dumping of substandard products at ridiculous prices in the market and unethical practices in the importation process. If the current trend persists, we may not have an industrial sector in a few years to come. That industry will be completely wiped out.”
According to him, only a robust package of incentives could save the manufacturing sector from total collapse.