LCCI advises FG on strategies for revenue growth
By Joy Obakeye
Director-General, Lagos Chamber of Commerce & Industry (LCCI), Dr Chinyere Almona, has urged the federal government look towards real estate, and infrastructure to reduce its debt commitments and improve further its fiscal situation to curtail the alarming rise in the debt portfolio.
She said LCCI was feared by the continuing growth in public debts in the face of insignificant revenue growth, the large presence of decaying infrastructure and the unsustainable burden of oil subsidy overhang.
According to her, though the decline in debt service appears positive, the ratio of debt service to government revenue at about 90 per cent remains alarming and unsustainable.
She explained that capital and interest payments on borrowed sums expose the country’s fiscal vulnerabilities.
Also, the government should, as a matter of urgency, emphasise strategies for revenue growth while blocking leakages. Importantly, the government might want to consider the need to deregulate the downstream subsector of the oil industry to block a major drain on revenue she added.
Most importantly, following the launch of the restructured Ministry of Finance Incorporated (MOFI) as the arrowhead of Nigeria’s efforts to optimise national assets by President Muhammadu Buhari on February 1, 2023, LCCI urged that references should, henceforth, be made to the growth in the stock of financial assets that Nigeria owns in corporate equities, real estate and infrastructure spaces.
Others are the returns Nigeria is generating on them, each time the Government of Nigeria is providing updates on the growth in the stock of the financial liabilities that Nigeria owes and the costs it is incurring on them, to provide local and global observers with a balanced picture of our financial evolution she stated.
Almona said if the above advice is implemented it would 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 DMO, to minimize our liabilities and the costs we incur on them, with equal vigour.
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“Indeed, issuance of joint reports by MOFI and DMO could be most ideal going forward. One-sided updates on liabilities with no updates on assets when such updates were adequately available could well be blamed for some of the downgrades of Nigeria’s debt issuance risk profile and outlook”.
She pointed out that rating outcomes would have been more favourable had updates on assets been provided side-by-side with updates about liabilities.
