The Lagos Chamber of Commerce and Business (LCCI) has expressed apprehension over the Federal Authorities’s plan to safe a $2.2 billion mortgage, cautioning that the transfer might exacerbate debt sustainability challenges and hinder crucial infrastructure growth.
The LCCI, in a press release launched on Friday, highlighted the pressing want for Nigeria to diversify its funding sources past debt financing.
The Director-Common of the LCCI, Dr. Chinyere Almona, urged the federal government to accentuate efforts to develop the non-oil income base by means of tax reforms and promote export-driven sectors similar to agriculture and manufacturing.
She emphasised various funding choices, together with boosting exports, tourism, agriculture, and stable mineral sources, as viable means to scale back reliance on borrowing.
Moreover, Dr. Almona really useful the privatization of sure state-owned enterprises (SOEs) and bettering the effectivity of people who stay beneath authorities management to boost income era.
Dr. Almona famous that Nigeria’s debt-to-Gross Home Product (GDP) ratio, estimated to be over 50%, coupled with debt servicing prices that overshadow capital expenditure, raises critical issues.
In keeping with her, the nation’s exterior debt already stands at roughly $17 billion, with implications for future financial stability.
“The LCCI warns of imminent debt sustainability points which will additional weaken crucial infrastructure within the nation,” Almona mentioned.
She additionally highlighted the danger of exterior forex shocks because of the naira’s depreciation in opposition to the greenback, which might additional pressure the financial system as debt servicing prices rise.
Dr. Almona urged the Federal Authorities to prioritize transparency and accountability in deploying borrowed funds.
“Funding crucial infrastructure ought to take priority, because it underpins financial progress and job creation,” she said.
“Decreasing exterior borrowing is essential, as the continual depreciation of the naira amplifies the burden of debt servicing,” she added.
The LCCI urged the Federal Authorities and the Nationwide Meeting to rigorously assess the long-term influence of Nigeria’s present borrowing trajectory.
“The federal government should tread cautiously on the trail of fiscal prudence. Undertaking accountability, efficient monitoring, and analysis of capital initiatives are important to make sure the environment friendly use of borrowed funds and the supply of tangible outcomes,” Almona suggested.
The chamber reiterated its dedication to advocating for sustainable financial insurance policies that guarantee fiscal accountability and strengthen Nigeria’s financial foundations.
The Nigerian Senate on Thursday at plenary authorized the brand new exterior borrowing plan request of $2.2 billion {dollars} introduced for consideration by President Bola Tinubu.
