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By Merit Ibe
The Lagos Chamber of Commerce and Industry (LCCI) has reiterated the call for a reassessment of governmen’s debt sources, recommending borrowing at lower rates and more non-tax revenue sources.
The chamber noted that with the deficit financing that comes from borrowing, it was indeed concerned about debt costs.
LCCI President, Michael Olawale-Cole, stated this yesterday, at the economic review and budget analysis session organised by the chamber to discuss what figures and policy statements mean for businesses to facilitate conversation, provide insight on the implications of the 2023 budget of the Federal Government for businesses, policymakers and investors
The LCCI boss opined that the revenue and capital expenditure performance of the 2022 budget indicated the fiscal resilience of the nigerian economy, adding that this should be consolidated for better outcomes in the 2023 fiscal year.
Olawale-Cole also noted that a higher non-oil revenue projection in comparison to oil revenue, if effectively implemented and actualised, will minimise the impact of external shocks on the nation’s revenues.
“With the 2023 federal government budget tagged “budget of fiscal consolidation and transition,” the federal government plans to spend #21.83 trillion in 2023, an increase of #1.32 trillion over the initial executive proposal for a total expenditure of #20.51 trillion and from #17.13 trillion in 2022.
“This budget size reaffirms the commitment of the government to pursuing an expansionary fiscal policy to stabilize growth and deepen the diversification of the nigerian economy.
“The overall budget deficit at n11.34 trillion for 2023 represents 5.03% of GDP. The budget deficit is to be financed mainly by borrowings made up of domestic sources of #7.04tn, foreign sources of #1.76trillion, multi-lateral/bi-lateral loan drawdowns of #1.77billion, and privatisation proceeds of #206.18 billion.
“The nigerian economy in 2022 recorded growth in the first three quarters but slowed down from 3.54% in q2 to 2.25% in q3. We expect to have a growth report for the last quarter of 2022.
“The slowdown was driven by a decline in aggregate demand in the face of inflation spikes, commodities’ supply chain disruption, high energy costs and forex scarcity.
“In 2023, we expect to see growth in sectors like manufacturing, agriculture, transport, telecommunications and trade.”
