Dike Onwuamaeze and Chris Uba
The Lagos Chamber of Commerce and Industry (LCCI) has made a strong appeal to the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to jettison the nationwide strike planned to commence today to protest against the recent hikes in petrol and electricity tariffs ‘as the Nigerian economy could no longer sustain the subsidies on these products’.
The chamber pointed out that it would be more productive for the unions to engage the government on how to provide palliatives that would cushion the hardship the tariffs hike has on the citizens than fighting to retain the burdensome subsidies on the country.
It stated that Nigeria is already on the throes of economic crises, warning that the economy might not withstand another disruption of economic activities soon after the COVID-19 lockdown.
The Director-General of the LCCI, Dr. Muda Yusuf, stated yesterday in a public statement that: “The LCCI appeals to labour to engage the government on poverty or hardship mitigating measures to cushion the effects of the price and tariff hike. The LCCI urges the labour unions and the government to scale up the dialogue and negotiations to avoid another round of disruption of economic activities in the country,” warning that “if the country continues with the current trend of monstrous and opaque subsidies, it could slip into bankruptcy.”
The chamber argued that the continuation of the subsidies would be counterproductive as it would deprive the country the private capital investments needed in the strategic sectors of the economy.
The Nigerian economy, according to the LCCI, is currently stumbling having suffered a significant contraction of 6.1 per cent in the second quarter of this year, and is yet to recover from the devastating shocks wreaked by COVID-19.
“The economy needs to be urgently pulled back from the brink through the adoption of appropriate policy reform measures. The reversal of the current reforms would exacerbate the challenges of the faltering Nigerian economy.
“The reality is that fiscal space to sustain the humongous corruption prone and opaque subsidies no longer exists. It is not in the best interest of the citizens, the economy and future generations to encourage the perpetuation of corruption ridden subsidy regimes.
“Besides, the country is grappling with a palpable fiscal sustainability challenge. There is mounting public debt which had grown from N12.6 trillion in December 2015 to N31 trillion as at June 2020. This is an increase of 146 per cent. The debt service to revenue ratio has also been skyrocketing, reaching unsustainable thresholds,” the chamber argued.
The LCCI, therefore, urged the government to urgently put palliatives in place to cushion the effect of the fuel price and electricity tariff hike on the vulnerable segments of the society.
He said: “This should be the bigger agenda for conversation at this time. The level of poverty is high and worrisome. Therefore, the intervention to mitigate the pains of reforms needs to be urgently activated. More importantly, effective targeting of such palliatives is crucial to ensuring that the vulnerable groups are effectively impacted.”