May 27, 2019

LCCI tasks FG on huge debts, manufacturing, others

LCCI tasks FG on huge debts, manufacturing, others

By Udeme Akpan

THE Lagos Chamber of Commerce and Industry, LCCI, has raised an alarm over dwindling investments in Nigeria’s oil and gas industry.

In its report, Economic Review of the four years of President Buhari obtained by Vanguard, yesterday, the LCCI stated: “Pace of reforms in the oil and gas sector remained painfully slow over the past four years.

“The Petroleum Industry Bill, PIB, was stalled, impeding the progress of the sector. In the upstream segment, contracting processes under the joint venture partnership took between 12 and 36 months. This was a major problem for investors in the sector. This is one reason no new investors are coming into the sector.

“The downstream was equally plagued by excessive regulation which made it difficult to unlock the huge potentials of the oil and gas sector. It is desirable to fully liberalize the sector so that investors can inject the needed private capital.”


The report, which beamed its searchlight on major sectors of the nation’s economy, stated: “Absence of an economic blueprint was a major concern in the early days of the administration, creating challenges of uncertainty.

Maritime Security: Nigerian waters now Safer — DG, NIMASA(Opens in a new browser tab)

“However, the Economic Recovery and Growth Plan, ERGP, launched in April 2017 by the President, provided clearer economic policy direction of the administration. This enhanced the level of investors’ confidence and diminished uncertainties.”


Positive internal, external factors point to equity market rebound in Q3 — Prof Uwaleke(Opens in a new browser tab)

It stated: “The forex policy was one of the major challenges faced by investors in the first two years of the administration. There were issues of uncertainty, volatility of exchange rate, round tripping which resulted from the huge differentials in the rates, multiplicity of rates, acute liquidity crises which adversely affected investors’ confidence.

“However, subsequent reforms in the forex market palliated these problems.  Subsequent upswing in oil price and increase in oil output brought a great deal of calm and relief to the forex market.”


The report stated: “The National Debt grew from N12.6 trillion or US$65.4 billion in 2015 to N24.3 trillion or $79.4 billion in 2018.  This represents an increase of 93%; an estimated 15% of these are owed by the states.  In the 2019 budget, debt service provision was N2.14 trillion; capital expenditure provision was N2.9 trillion and estimated revenue for the federal government was N6.97 trillion.”


It stated: “The manufacturing sector experienced some major challenges during the past four years.  The factors were both external and domestic. The main external factor was the collapse of oil price which affected forex availability and triggered sharp exchange rate depreciation in the first half of the administration.

“However, the policy component of the problem resulted largely from foreign exchange policy choices which aggravated the problem of forex liquidity.  The restriction of 41 items from access to interbank forex market added to the plight of some manufacturing firms.”


It stated: “The sector gained significant government support, especially in funding, with particular reference to rice farming and processing. However, the pace of mechanization is still low which is why why food prices remain an issue in the country.

‘’It is only mechanized agriculture that can guarantee food security in a country with an estimated population of 200 million.  The protracted challenge of insecurity took its toll on the agricultural production in the country, especially in the last two years of the administration.”