The Lagos Chamber of Commerce and Industry (LCCI) has warned that Nigeria is at a risk of slipping into economic stagflation unless urgent necessary steps are taken to tackle the factors currently inhibiting the nation’s economic growth.
Director General, LCCI, Dr Chinyere Almona, in a statement made available to newsmen, Tuesday, also emphasized the need for the federal government to sustain its targeted interventions in critical sectors of the economy.
She stated: “The economy has continued to struggle with many inhibiting burdens like inflation, weak revenue generation, degenerated infrastructure, forex challenges, unsustainable cost profile seen in debt services and subsidy payments, and the daunting threats of worsening insecurity.
“The chamber is concerned that if we continue in this trajectory, the economy may bleed away into a stagflation which will impact on production cost, job losses, worsened forex crisis, and dampened growth in the medium term.”
Reviewing the Gross Domestic Product (GDP) Second Quarter 2022 report recently released by the National Bureau of Statistics (NBS), LCCI highlighted some threats to the nation’s future growth that need special attention.
It noted that the oil sector has consistently recorded negative growth for the ninth consecutive quarter, calling on the government to tackle the menace of oil theft and pipeline vandalism with sterner approach.
The chamber also lamented the comparatively low growth in agriculture (1.2%) and manufacturing (3%) compared with other sectors that grew at above 5%.
“This is also indicative of the threats facing these sectors that power Nigeria’s real sector.
“The woes in these two sectors are responsible for the frightening rise in our inflation rate. And with the excruciating burden from debt service, subsidy payments, and worsening insecurity, many more production activities may be constrained in the coming months,” the LCCI added.
The chamber further urged the government to continue with the non-oil campaigns and interventions to sustain the targeted financing towards boosting non-oil exports for enhanced foreign exchange earnings.