Paragraph 1: Overview and Commendation
The Lagos Chamber of Commerce and Industry (LCCI) has responded to the Federal Government’s proposed 2025 budget, titled "Budget of Restoration: Securing Peace, Rebuilding Prosperity," with a mixture of cautious optimism and pointed recommendations. While commending the government’s focus on key sectors like security, infrastructure, education, health, and agriculture, the LCCI emphasized the crucial importance of effective implementation to translate the budget’s ambitious goals into tangible improvements for the Nigerian economy. The Chamber recognizes the government’s intent to address pressing national issues through this budget, particularly in areas vital for macroeconomic stability and inclusive growth. However, the LCCI’s statement also highlights potential challenges and proposes solutions to ensure the budget’s success.
Paragraph 2: Budget Implementation and Revenue Projections
A key concern raised by the LCCI is the government’s track record on budget execution. The extension of the 2024 budget implementation cycle to June 2025 raises red flags, signaling potential weaknesses in the budget execution process. The LCCI urged close monitoring to prevent similar delays in the future and called on the National Assembly to expedite its deliberations on the 2025 Appropriation Bill to maintain the January-December fiscal cycle. Furthermore, the LCCI addressed the ambitious revenue projection of N34.82 trillion, acknowledging the need for Nigeria to significantly improve its tax-to-GDP ratio, which is currently among the lowest globally. The Chamber recommended a multi-pronged approach to enhance revenue generation, including accelerating tax reforms, simplifying tax processes, integrating the informal sector into the tax system, and leveraging technology for improved tax collection, minimizing leakages, and promoting transparency.
Paragraph 3: Debt Management and Fiscal Discipline
The substantial allocation of N15.81 trillion for debt servicing in the 2025 budget underscores the urgency of fiscal discipline and prudent debt management. The LCCI advocated for prioritizing high-impact, self-sustaining projects that generate revenue and contribute to economic growth, thereby mitigating the debt burden. Exploring alternative funding mechanisms, such as public-private partnerships (PPPs), was also highlighted as a crucial strategy to maintain sustainable debt levels and avoid over-reliance on borrowing. The Chamber emphasized that responsible fiscal management is essential for long-term economic stability and sustainable development.
Paragraph 4: Stabilizing the Economy and Addressing Inflation
The LCCI emphasized the need for structural reforms to stabilize the naira exchange rate at N1,400/$1 and reduce inflation to 15 percent. Achieving these targets requires addressing several critical areas. The Chamber urged the government to tackle bottlenecks in the food and energy supply chains, accelerate local petroleum production projects, and ensure alignment between monetary and fiscal policies. Restoring confidence in the naira and easing inflationary pressures were highlighted as top priorities for achieving macroeconomic stability and creating a conducive environment for businesses to thrive.
Paragraph 5: Oil Production and Security Concerns
The LCCI acknowledged the importance of the oil sector for Nigeria’s revenue generation and economic performance. The Chamber stressed the need for decisive action against pipeline vandalism and oil theft to achieve the budget’s ambitious oil production target of 2.06 million barrels per day. Creating a sound regulatory environment is also crucial for attracting investments and boosting activities in the oil and gas sector. While commending the allocation of N4.91 trillion to defense, the LCCI urged the government to adopt a comprehensive approach to security challenges, including investments in intelligence, surveillance technology, and poverty reduction initiatives. The Chamber particularly emphasized the importance of youth empowerment programs to address the root causes of insecurity and criminality.
Paragraph 6: Infrastructure, Education, Health, and Implementation
The LCCI acknowledged the significant allocations to infrastructure (N4.06 trillion), education, and health, recognizing these sectors as crucial drivers of economic growth and human capital development. However, the Chamber stressed that merely allocating funds is insufficient; transparent and efficient project execution is paramount. The LCCI highlighted the interconnectedness of the budget’s various goals, emphasizing that achieving the ambitious targets of halving inflation and stabilizing the foreign exchange rate hinges on robust policy implementation and coherence across government strategies. The Chamber’s message is clear: The success of the 2025 budget depends not just on its ambitious goals but on the government’s commitment to effective and transparent implementation.
