The Lagos Chamber of Commerce and Industry (LCCI) says the federal government’s planned petrol subsidy removal remains one of the best economic decisions that will reduce Nigeria’s debts and tackle widespread corruption in the oil sector.

LCCl’s president, Michael Olawale-Cole, said this during the body’s second-quarter State of the Economy conference on Tuesday in Lagos.

“Though the planned removal of fuel subsidies may cause further northward movement of inflation in the short term, it is arguably one of the best economic decisions to reduce our unsustainable debts and widespread corruption in that sector,” said Mr Olawale-Cole.

He added, “The government must, however, take cognisance of its socio-economic implications, especially with unemployment at the unwholesome rate of about 40 per cent.”

Nigeria secured an $800 million relief package from the World Bank to minimise the effect of subsidy removal on the most vulnerable in society.

The Debt Management Office puts Nigeria’s public debt at N46.25 trillion ($103.11 billion) as of December 2022, compared to N39.56 trillion ($95.77 billion) in 2021.

Mr Olawale-Cole urged the government to roll out several cushioning measures ahead of the subsidy removal in the year’s second half to mitigate any likely economic disruptions.

The LCCI’s president frowned at borrowing to fund subsidies or support uneconomic ventures, saying the government must prioritise exploring other avenues.

He stressed the need to follow the recently launched and restructured Ministry of Finance Incorporated (MOFI) by President Muhammadu Buhari on February 1 to optimise national assets.

The LCCI’s president advised that copious references should subsequently be made on the growth and returns of the country’s stock of financial assets in corporate equities, real estate and infrastructure spaces.

He said this would provide local and global observers with a balanced picture of our financial position.

“It would also motivate national asset managers, led by MOFI, to grow our assets and the returns on them as well as motivate our national liability managers, led by the DMO, to minimise our liabilities and the costs we incur on them with equal vigour,” stated Mr Olawale-Cole. “Indeed, issuance of joint reports by MOFI and DMO would be most ideal going forward.”

Addressing inflationary pressure, which inched upwards in March to 22.04 per cent, Mr Olawale-Cole noted that hiking the monetary policy rate had thus far proven to be ineffective and insufficient in taming inflation.

He stated that in most economies, amid the cost-of-living crisis, the priorities remained to achieve sustained disinflation and reasonable real growth, urging the government to strengthen the agriculture and power sector, support infrastructure development and improve supply chains.

(NAN)