LCCI Advises FG To Be More Stern With Oil Thieves

The Lagos Chamber of Commerce and Industry (LCCI) has lamented the steady drop in Nigeria's oil revenues and urged the Federal Government to take tougher action against the problems of oil theft and pipeline damage.

It stated that the country may increase its foreign exchange earnings by taking effective action against the challenge.

In addition, it advised the government to take out loans from less expensive sources in order to lessen the cost of debt payments and to move swiftly toward ending gasoline subsidies.

The oil sector had consistently recorded negative growth for the ninth consecutive quarter, contracting again by -11.8 per cent year-over-year in Q2 2022, following a more severe contraction of -26 per cent year-over-year in Q1.

This was stated in a statement by its Director General, Dr Chinyere Almona, titled "The Nigerian Economy at 62: The Need for Big Decisions," on Saturday.

“If oil revenue makes up more than 80 per cent of government revenue, we expect the government to tackle the menace of oil theft and pipeline vandalism with a sterner approach,” it said.

According to the LCCI, the non-oil industry expanded by 4.8% year over year in Q2 of 22 as opposed to 6.1% in Q1 of 22.

The report revealed that the growth rates of 1.2% for agriculture and 3% for manufacturing were very low when compared to other industries, which saw growth rates of more than 5%.

“And with the excruciating burden from debt service, subsidy payments, and worsening insecurity, many more production activities may be constrained in the coming months.

"The Federal Government needs to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, export infrastructure, tackling insecurity, and free up more money from subsidy payments.

“We urge the government to tackle oil theft to earn more foreign exchange, borrow from cheaper sources to reduce the burden of debt servicing, and take a decisive step toward removing fuel subsidies,” the statement reads in part.

The LCCI requested the Federal Government to decentralise the national grid because it further cited a lack of reliable power and security as fundamental obstacles to doing business in Nigeria.

"Poor power supply continues to be a significant strain on enterprises.

"It is one area where the trend since independence has been one of gradual deterioration.

"Due to rising business spending on diesel and gasoline, this development has had a detrimental influence on investment during the previous few years.

"We can no longer rely on a centralised power supply due to the regular collapses noted by the national grid.

"Renewable energy and decentralising the national grid are the way to go."

It forewarned that the outlook for the real sector would remain bleak in the absence of effective and ongoing protection and support for it, as well as a significant improvement in infrastructure, particularly for the small-scale industries struggling in the face of cheap imports into the nation and high production and operating costs in the domestic economy.

It added, “The security situation in the country deteriorated in the last year, assuming a very worrisome dimension.

"Access to markets in the troubled parts of the country has been reduced for many enterprises, with negative consequences for investors’ confidence.

“Our nation is at a cross-road and in dire need of big decisions to drive the drastic transformation the economy requires to return to economic prosperity.

"Our nation Nigeria has come a long way and is too big to fail.”