Considering the current economic challenges facing the Nigerian economy, the Chamber urges the Federal Government to provide special support mechanisms to strategic companies and industries that play critical roles in achieving inclusive economic growth. The major recent improvements recorded in Nigeria’s economy could be attributed to the game-changing interventions of key players in the private sector.
As Nigeria strives to stabilize prices, boost FOREX inflows, and attract Foreign Direct Investments (FDIs), it is imperative to recognize the pivotal role that certain companies play in driving growth, fostering innovation, and creating employment opportunities. These strategic companies, often operating in key sectors such as manufacturing, agriculture, technology, and infrastructure, serve as the backbone of the economy, contributing significantly to its stability and resilience.
The Lagos Chamber of Commerce and Industry (LCCI) acknowledges the significant impact that Dangote Refinery is beginning to make on Nigeria’s economy, particularly in achieving national self-sufficiency in the production of diesel and aviation fuel. The 650,000 barrels per day refinery, a project of monumental scale, has started to fulfill its promise by addressing critical issues in the Nigerian energy sector. It was reported that with 100 million litres of diesel pumped into the market last week, the Dangote Refinery helped crash the price of diesel from about N1,800 to N1,225 per litre. With another tranche of supply in the coming days, the price of diesel is expected to drop to a low of about N1,000 per litre.
If the refinery commences the production of Premium Motor Spirit (PMS) next month, petrol prices are also expected to dip, creating a great relief on cost of energy across all sectors of the economy. The LCCI recognizes the refinery’s contribution to enhancing energy security and reducing the country’s reliance on imported fuel. The availability of locally produced diesel signifies a significant step towards achieving self-sufficiency in energy production, ultimately bolstering Nigeria’s economic resilience.
Another game-changer intervention came from the commencement of international flights to the United Kingdom by Nigeria’s Air Peace. This has become a delight to Nigerian travellers as this has forced foreign airlines to crash their prices by about 60 percent in response to the cheaper rates by Air Peace. We need more support for local companies to play in sectors that have hitherto been monopolized by foreign companies. More local airlines covering more international routes means more aviation supply chain-related jobs, more foreign currency savings and earnings, and more reduction in the prices of international flight tickets in Nigeria. Enabling optimal utilization of all our Bilateral Air Services Agreements creates a sustainable source of foreign currency savings and earnings for our country.
These companies, notwithstanding their strategic importance, are not immune to the adverse impacts of economic downturns, market uncertainties, and global disruptions. The ongoing challenges, exacerbated by the rising cost of doing business and other socio-economic factors like threatening insecurity conditions, have intensified the need for targeted interventions and support from the government. Therefore, we call upon the Federal Government to implement measures aimed at providing special support to these strategic companies. This support could include:
1. Concessional credit and low-interest loan facilitation, grants, or waivers to eligible companies to facilitate their operational continuity, investment in infrastructure, and technological advancement.
2. Creating a conducive policy environment by improving policies and regulatory frameworks that incentivize innovation, entrepreneurship, and long-term investment.
3. Enhance international trade potential by facilitating market access and trade opportunities both domestically and internationally, enabling companies to expand their reach and tap into new growth markets.
4. Funding of innovative research and development by allocating resources towards initiatives aimed at promoting product diversification and value addition across strategic sectors.
By extending support to strategic companies, the Federal Government can stimulate economic growth, foster job creation, and promote inclusive development across Nigeria. Furthermore, these measures will contribute to enhancing the country’s competitiveness on the global stage, attracting foreign investment, and positioning Nigeria as a key player in the regional and international markets.
In conclusion, we urge the Federal Government to prioritize the needs of strategic companies and take proactive steps to address their challenges. By doing so, Nigeria can pave the way for a more resilient, diversified, and inclusive economy that benefits all segments of society.
Dr Chinyere Almona, FCA
Director General
Lagos Chamber of Commerce & Industry
Monday 8th April 2024
