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Tag: LCCI

  • LCCI faults CBN’s decision on forex

    LCCI faults CBN’s decision on forex

    The dust raised by the Foreign Exchange (forex) policy introduced by the Central Bank of Nigeria (CBN), which excluded 41 items from the foreign exchange market, has refused to settle. This time, the decision of the Monetary Policy Committee (MPC) of the CBN to maintain status quo on its policy stance has not gone down well with members of Lagos Chamber of Commerce and Industry (LCCI)

    The MPC had after its meeting of July 23 and 24, 2015, decided to retain the current demand management model in the foreign exchange market.

    However, after a review of the MPC’s decisions, LCCI said “this singular decision reflects an ominous indifference of the CBN to the plight of various stakeholders including manufacturers over its foreign exchange management strategy.”

    The Chamber in a statement signed by its President Remi Bello, said it shared CBN’s concern that there are no easy choices given the dwindling crude oil price, dwindling accretion to reserves, weak fiscal position of government and the pressure on foreign reserves.

    “We also share the submission of the apex bank that the Federal Government needs to unfold its economic agenda to boost investors’ confidence and reduce uncertainty in the economy.

    “We support CBN’s position that monetary policy instruments need to be complemented with fiscal policies to achieve the desired economic outcomes, as monetary policy has severe limitations in the present circumstances,” the statement said.

    The LCCI however, argued that the present model, which is essentially an administrative allocation mechanism, has profound collateral consequences for the economy – the opaqueness of the foreign exchange management, vulnerability to corrupt practices and distortions in the economy.

    LCCI noted that submissions by stakeholders in the economy to the CBN to review its list of items not valid for foreign exchange were completely ignored by the MPC, and that the matter was not even mentioned in the communiqué. “We are gravely disturbed by this disposition,” Bello said.

    Bello further expressed the chamber’s worry on the apparent trivialisation by the CBN of developments in the parallel market segment of the foreign exchange market. “It is curious that the unprecedented disparity in the rates did not seem to bother the CBN,” he added.

    He also affirmed that the widening disparity in rates has profound implications for the economy. “It is an incentive for round tripping. “It would create distortions in the economy, compromise the principle of level playing field in the economy, and make the management of the foreign exchange market vulnerable to all manner of sharp practices and corruption,” he added.

    LCCI pointed out that the large informal sector of the economy is fed largely from this segment of the market and that these are issues the CBN cannot afford to ignore.

    He observed that fuel import exerts the highest pressure on the foreign exchange market and the country’s reserves.

    While stating that the chamber expects this matter to be highlighted in the MPC communiqué, Bello called on President Muhammadu Buhari to do something urgently about these critical issues.

    He said: “The protracted problem of excess liquidity should be addressed in a manner that would not persistently cause disruptions and dislocations in the economy.  The therapy of interminable monetary tightening has really not worked.  The focus has been on tackling the symptoms, not the cause.”

    Bello advised that fixing the problem through a root cause analysis will be more helpful to the economy. “We note, for instance, that while the benchmark for Net Credit to the economy was 29.3 per cent for 2015, credit to Federal Government grew by 40 per cent as at June 2015. These are issues to worry about,” he said.

    Bello also noted that the money supply impact of monetisation of oil revenue receipts, banking system credit to government, and the various intervention funds of the CBN need to be critically examined at this time.

    According to him, the crisis of excess liquidity has done incalculable damage to the economy for many years.  “There is a strong nexus between the crisis of liquidity, rising inflation; exchange rate depreciation, weakening purchasing power and worsening poverty of citizens over the years.  It is in fact the principal reason for the paradox of poverty in the midst of plenty,” he pointed out.

    The LCCI President disagreed with CBN that the factors driving inflation at this time are transient as suggested by the MPC. Rather, he observed that the continued depreciation of the currency and the structural issues are major factors putting pressures on prices, which needs to be tackled urgently.

  • CBN naive about real sector, says LCCI

    CBN naive about real sector, says LCCI

    The last may not have been heard about the exclusion of 41 items from the foreign exchange (forex) markket by the Central Bank of Nigeria (CBN). The Lagos Chamber of Commerce and Industry (LCCI) has slammed CBN for what it called the bank‘s “limited understanding of the manufacturing process of many of the sectors affected by the policy”.

    While introducing the list, the CBN declared the items invalid for forex from the interbank market and Bureaux de Change (BDC). But the policy did not go down well with members of the Organised Private Sector (OPS).

    LCCI consequently organised a dialogue between CBN officials, business leaders and members of the Chamber to discuss the policy, its rationale and consequences, and to advise on the way forward.

    In a communiqué after the meeting signed by its Director-General, Mr. Muda Yusuf, LCCI said it understood CBN’s constraints  in fashioning the policy.

    “Many of the restricted items are irreplaceable raw materials in the manufacturing process of many industries and this policy will cause significant damage to the Nigerian manufacturing sector and economy.

    ‘’We affirm that while there are several items on the list which any patriotic Nigerian will not object to, there are many others that will harm the manufacturing sector,” Yusuf said.

    He said given CBN’s dominant role in forex supplies and the fact that all three ‘official’ markets are excluded, the policy means that manufacturers who require any of the restricted items as input and raw materials for their production may have to shut their operations once their stock is exhausted.

    He said the items include those which are critical to manufacturing. He advised CBN to simulate the impact of the policy on employment, inflation and output in the year and review it. He insisted that the impact  of the three areas would be negative.

    Yusuf argued that the new CBN policy was ambiguous, to both manufacturers and banks.

    “We urge CBN to immediately amend the policy with full product definition and specification of all restricted items, including HS Codes and excluding any items which are non-substitutable industrial raw materials from the list. The CBN policy should also allow appropriate time frames for items, which require some time interval before local substitutes can be created for imported raw materials,” he said.

    The LCCI chief reminded the CBN and the Federal Government that manufacturers had suffered from the recent currency devaluation. Compounding recent devaluation losses with higher cost and inability to source critical raw materials, he argued, might push many firms over the precipice, resulting in business closures, loss of jobs, declined manufacturing sector production and greater social tension.

    Continuing, he said: “We call CBN’s attention to the fact that the fundamental forces the CBN is struggling against are economic and fiscal policy dependent while the bank continues to exert monetary policy tools almost to a point in which economic harm may result. The fundamental factors are diversification of the Nigerian economy in terms of exports and government revenue, issues around downstream oil sector deregulation and upstream oil sector fiscal regimes.

    “Others are power sector efficiency and creating alternative economies in solid minerals, agriculture, manufacturing and other sectors towards building a productive, export-led local economy. These matters cannot be resolved through exclusive deployment of monetary policy tools.”

    Yusuf suggested a conversation between the CBN and Federal Government so that a more appropriate regime of economic and fiscal polic initiatives could be designed to address these issues.

    He called on the CBN to harmonise its policies with other agencies of government, including Customs, Federal Inland Revenue Service (FIRS), Standards Organisation of Nigeria (SON), and Immigration.

    “Moreover we urge CBN to be mindful of the economic role and importance of Small and Medium Enterprises (SMEs) and moderate-sized manufacturers as it develops policies. The CBN should avoid policies that may produce oligopolistic and even monopolistic outcomes at variance with its mandate of building a sound economy,” he advised.

    LCCI also urged increased engagement and consultation between the CBN and manufacturers and other stakeholders so that policies would be based on proper understanding of the real impact on stakeholder groups and the economy.

  • LCCI seeks economy’s diversification

    LCCI seeks economy’s diversification

    • Plan trade fair in three venues, same day

    The Lagos Chamber of Commerce and industry (LCCI) has called on the Federal Government to diversify the income base of the economy by paying necessary attention to the non-oil sector, such as agriculture and solid minerals.

    LCCI President Mr. Remi Bello said the need to reposition the economy and correct its dependence on oil has become necessary to ensure that the nation earned more from agric commodities and the solid minerals sector.

    He spoke ahead of the public presentation  of the prospectus of the 2015 Lagos International Trade Fair holding from Friday November 6 to 15.  Its  the theme is “Enhancing value addition in the non-oil economy.”

    He said the daunting economic challenges facing the country are as a result of the fall in the global price of crude oil.

    Bello stated that for a country like Nigeria that had over the years relied almost entirely on oil to fund its economy, the implications are dire and frightening. He regretted that already states of the federation are currently having challenges meeting their basic financial obligations.

    According to him, if the Nigerian economy is to survive and the country achieves industrialization, there is the urgent need to diversify its income sources. He said the Chamber is committed to drawing attention to the imperative of non-oil export and harnessing the nation’s human resources with modern technology to add value to the economy.

    Bello assured that the 2015 trade fair will provide a platform to not only identify these alternatives to oil but also draw attention to the opportunities that abound in value addition to enhance earning and profitability.

    The investment forum, which is planned to hold at the Muson Centre, Lagos, will provide additional resources for discerning business people, as the forum will serve as a master class and intellectual power house for all that is needed in exploiting the investment opportunities in the non-oil sector.

    LCCI, Chairman, Trade promotion Board, Dr. Micheal Olawale-Cole, in his remarks, said  the Chamber took another bold step by expanding the scope of the international trade fair with events billed to hold simultaneously at the Tafawa Balewa Square, Muson Centre and the Freedom Square-all on the Lagos Island.

    On the preparation to make the three venues a success, Olawale-Cole said “We are quite conscious of the enormity of the requirements and the challenges. We have therefore, formed alliances with competent individuals and organisations to improve our capacities. These added capacities will ensure that the 2015 Lagos International Trade Fair provides the necessary and desired dividends of a truly effective trade show with a corresponding positive effect on the economy.”

    Olawale-Cole said the three venues, all within walking distance of each other, creating a huge business hub in Lagos lsland within the ten-day fair period has become a reality. “We have therefore, opened the doors of the Lagos international trade fair to attract exhibitors from virtually all sectors of the nation,” he added.

    He said the fair is expecting a larger number than last year’s that recorded over 150,000 visitors, noting however, that last year’s fair was hampered by the Ebola scare, which prevented the Chinese delegation from being part of the fair.

    According to him, over 90 visitors came for business. He also promised a product diversification as over 70 per cent of last year’s exhibitors indicated interest to participate in addition to new businesses that have shown tremendous interest in participation.

    Olawale-Cole also promised that the electricity situation will improve while adequate care has been taken to provide security and other infrastructure services.

     

  • LCCI: ICT has revolutionalised business

    LCCI: ICT has revolutionalised business

    The growth in the Information Communication Technology (ICT) industry in the last 15 years has revolutionalised businesses, President, Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello, has said.

    He spoke at the ICT Expo (ICTEL EXPO) by the Trade Promotion Board of LCCI in Lagos, which  had its theme as ‘Connecting businesses and creating opportunities’.

    Bello said all sectors of the economy rely on ICT for their operations.

    “From the financial sector, where e-banking is now the vogue, the agricultural sector, where the government now sells fertiliser through mobile phones to the consumer goods sector where online stores are now all over, ICT and telecommunications have become the backbone of businesses,” he said.

    Bello explained that the expo was aimed at providing a credible platform to advance the opportunities and linkages in ICT.

    He reiterated the chamber’s optimism towards a great investment opportunity that would come from closer interactions and business integration among ICT players and their customers at the expo, pledging his support towards it.

    LCCI Vice President and Chairman, Trade Promotion Board, Dr. Michael Olawale-Cole, said the chamber chose the ICT sector because of its potential to revolutionalise business transformation, growth and improving the standard of living of people and communities through innovations.

    He added: “The expo gives a 360 degree view of the ICT industry and provides visibility to sweeping trends and innovations as well as providing an excellent networking opportunity for business decision makers, innovation managers, enterprise solution providers and start-ups.’’

    Others are ICT academics, original equipment manufacturers (OEMs), investors, venture capitalists and other players in the ICT and telecom sectors,” he explained.

    Olawale-Cole said LCCI was aware of the revolutionary roles ICT and telecoms play in business relationship and development.

    He said with the incursion of ICT and telecoms, it would no longer be business as usual. “It has dawned on business people that you either embrace this technological evolution or ignore it at your own peril,” he said.

    Earlier, Executive Chairman, Nigeria Communications Commission (NCC), Dr. Eugune Juwah, said ICT  has grown such that it has moved into data and broadband.

    He said though there were challenges, the advantages of ICT in modern business could not be over emphasised.

    Juwah, who was represented by the Director, Special Duties of NCC, Ms Akiode Funlola, said with appropriate infrastructure the sector would grow the industrial sector.

  • LCCI advises Buhari on cost of doing business, others

    LCCI advises Buhari on cost of doing business, others

    The Lagos Chamber of Commerce and Industry (LCCI) yesterday urged president-elect, General Muhammadu Buhari (rtd) to urgently address the fundamental problem of high cost of doing business in the country as soon as his government is inaugurated.

    Its President, Alhaji Remi Bello who spoke during Council Meeting lamented that the declining oil prices and its impact on fiscal outlook presents a significant challenge to the incoming administration.

    According to him, the outlook for many macro-economic indicators is not bright with foreign reserves dipping below $30 billion and persistent pressure on the naira.  He is however hopeful that the success of the presidential election will mitigate the anxiety and uncertainty that characterised the business environment before the elections, adding that investors’ confidence will be positively impacted by recent developments in the political space.

    The LCCI boss urged the incoming administration to also address the fundamentals problem of low productivity which he blamed on macro-economic factors, institutional challenges and structural issues, stressing that the government must also prioritise  issues such as blocking all fiscal leakages and wastes in government, especially in respect of the management of petroleum products subsidy. LCCI also called for immediate review of the activities of the Joint Task Force (JTF’s) in the Niger Delta area where revenue is lost daily due to oil theft.

    Other issues according to him, are import duty waivers, ghost workers in the ministries, departments and agencies (MDAs), and service wide votes. He further stressed the need to prioritise government expenditure to boost investments in critical infrastructure. The challenge of high cost of governance, collapse of the rail system, poor power supply also demand urgent attention, he added. He also called on the in-coming administration to sustain the momentum of the war on terrorism and insurgency in parts of the country.

    Its Director-General, Mr.Muda Yusuf called for performances audit of key regulatory institutions whose activities impact on the private sector.

    Yusuf said the government should ensure acceleration of reforms on the oil & gas sector in order to attract more private investments in both the upstream & downstream segments of the sector.  This would save the economy the current huge foreign exchange used for importation of petroleum products.

  • LCCI opposes bill on firms’ compulsory listing

    LCCI opposes bill on firms’ compulsory listing

    Should  companies with shareholders funds and yearly turnover, exceeding N40 billion and N80 billion become Public Liability Comapnies (PLCs) listed on the Stock Exchange?

    No, says the Lagos Chamber of Commerce and Industry (LCCI), which is opposing the Private Companies Conversion and  Ling Bill 2013 now before the National Assembly.

    The bill is seeking to compel vibrant firms to become PLC’s and listed on the exchange.

    Instead, the Chamber is advocating the creation of an incentive regime that would encourage voluntary listing on the exchange. It asked the National Assembly to discard the Bill and take steps to amend the Companies and Allied Matters Act (CAMA) 2004.

    In a communiqué signed by its Director-General, Mr. Muda Yusuf, after a stakeholders meeting to discuss the Bill, LCCI noted that the Private Companies’ Conversion and Listing Bill 2013 contravenes the provisions of existing laws in Nigeria, which encourages the right to own property, movable or immovable, as well as the right against expropriation of private property as contemplated by sections 44 of the 1999 Constitution as amended and section 25 of the Nigerian Investment Promotion CommissionAct, 2004, respectively.

    Quoting section 25 (1) (b) of the Nigerian Investment Promotion Commission Act, CAP. NI17 LFN, 2004, LCCI said it categorically provides that “No person who owns, whether wholly or in part, the capital of any company shall be compelled by law to surrender his interest in the capital to any other person.” The statement said the Bill which did not emphasise the need to amend the ‘out-of-tune-with-reality’ CAMA, which was enacted in 1968 but last amended in 1990 without recourse to the new ways of doing business is a minus.

    It further stated that the Bill serves as a disincentive to entre-preneurship and foreign investment, which the government has continually advocated as a means of creating employment for the teeming unemployed youths and reducing poverty. In addition, the Bill, LCCI said, is replete with bad draftmanship. It noted, for instance, that the Bill adopts a definition of a private company under the (CAMA), but goes further to extend the definition to cover “any body corporate, firm or partnership or any entity that participates in the sectors contemplated” in the Act.

    He said the inclusion of firms and partnership in the definition is curious as one wonders if the Bill expects the qualifying professional firms to equally go public and be listed on the floor of the stock exchange. Equally worrisome is the use of the phrase “public liability company” throughout the Bill. LCCI argued that the phrase is not defined in the Bill and CAMA uses no such phrase.

    “The term used in CAMA is “public limited company”. The phrase “anybody corporate” could also mean that the Bill covers State owned corporate bodies such as the Corporate Affairs Commission (CAC), Nigerian National Petroleum Corporation (NNPC) and the Central Bank of Nigeria (CBN), “ the statement said.

    Yusuf argued that in the face of falling oil prices and the need for government to generate more revenue from taxes, the tax reliefs proposed by the Bill to companies that comply with its mandatory conversion and listing requirements is not desirous at this critical moment, especially in view of the fact that the companies that would benefit from the relief constitute about 32 per cent of diligent tax payers in the country.

    He further argued that the Bill signifies a drastic shift in Nigeria’s policy on foreign direct investment. He stressed that a lot of companies have come into Nigeria on the belief that Nigeria operates a free enterprise system that guarantees them the right to own and repatriate their hard earned funds. To him, the Bill negates this concept of free enterprise in Nigeria and has the undesirable consequence of constituting a disincentive to foreign investment in Nigeria.

    He therefore, called for its rejection in its entirety, insisting that the Bill, which is currently before the House of Representatives and has scaled second reading should not be allowed to see the light of day.

    Prior to this time, LCCI had on January 27, 2015 organised a Stakeholder’s forum to discuss the Bill. The forum was attended by representatives of NSE and the private sector, including the multinational companies. At the end of the forum, representatives of NSE agreed to the tenets of the Bill, but not in its current form. The NSE therefore, sent representations to the National Assembly as to what they think the Bill should contain.

    However, representatives of the private companies, the multinationals and other stakeholders present would have none of that. They were unanimous in rejecting the Bill in its entirety.

    The controversial was sponsored by Deputy Chairman, House of Representatives Committee on Capital Market Institutions, Honourable Chris Emeka Azubogu. The Bill, when passed into law, will compel a private company that falls into the category to, within 12 months from the commencement of the bill, take all necessary steps to convert from a private limited liability company to a public company within the provisions of the CAMA.

    Such a company shall, within 12 months from the date of conversion, take all necessary steps to list its shares on a stock market for brokerage. A private liability company, which the provision of the bill applies, shall maintain or cause to be maintained proper accounts and records to enable fair view to be formed of its assets, liabilities, income and expenditure.

    Thehope was that the bill would deepen the capital market and also boost the economy, a position now being hotly contested by the LCCI.

     

  • LCCI backs Senate’s tinkering with 2015 draft budget

    LCCI backs Senate’s tinkering with 2015 draft budget

    TheLagos Chamber of Commerce and Industry ( LCCI) has hailed the outcome of the deliberations of the Senate on 2015 Draft Budget, the Medium Term Expenditure Framework [MTEF] and the Fiscal Strategy Paper (FSP).

    LCCI President Alhaji Remi Bello said at the weekend that many of the decisions were consistent with current realities, which called for  spending for national development priorities.

     He said: “We commend the Senate’s decision to cut the 2015 National Assembly budget by 25 per cent (N37.5 billion) from N150 billion to N112.5 billion. This will definitely free up resources to finance other priorities.

    “The increase of the capital budget from N633 billion to N700 billion is good news. However, this figure remains grossly inadequate in the light of the huge infrastructure deficit in the country and the urgent need to build a robust and sustainable non-oil economy.”

    He praised the Senate’s decision to reduce the recurrent expenditure by N116 billion from N2.61 to N2.5 trillion as a welcome development.

    He, however, noted that  a more drastic reduction in recurrent budget was desirable.

    He also  endorsed  the stance of the Senate on the provision for the contentious Service Wide Vote in the draft 2015 budget.

    According to him, the decision to scrap this provision was salutary in the light of the transparency issues that have marred the Service Wide Vote over the years.

  • Fiscal responsibility’ll grow economy, says LCCI

    Fiscal responsibility’ll grow economy, says LCCI

    The Nigerian National Petroleum Corporation (NNPC) and the Coalition of Grassroot NGO (CGN) have set up a monitoring team to ensure that kerosene is sold at N50 per litre, The Nation has learnt.

    The product though officially sold for N50 per litre, goes for over N120 per litre.

    The 15-man team will ensure that the product does not go to the black market through  middlemen. The Team Leader,  Waheed Adetunji, assured that Nigerians would not be subjected to hardship as a result of the inordinate ambition and get rich-quick attitude of a few Nigerians. “We have a job to do to ensure kerosene gets to the common man regularly and at regulated price of N50 per litre,” he said.

    He said the team would ensure that no one buys more than 25 litres of the product at a go. To checkmate officials and dealers, the  team would also ensure that measurement of kerosene at each station was taken before and after sales daily. It is also expected to report cases where there are infractions  of procedures by the dealers.

    The product will be available between 8am and 5pm daily.

    According to Adetunji, this  will halt the mid-night racketeering.

    Adetunji said kerosene would be sold at the NNPC Mega Stations and affiliated stations are scattered all over the country, urging Nigerians to take advantage of this intervention to get kerosene at the regulated price.

  • LCCI, OPS task Ambode, Agbaje on multiple taxation, others

    LCCI, OPS task Ambode, Agbaje on multiple taxation, others

    The Lagos Chamber of Commerce and Industry (LCCI) and the Organised Private Sector (OPS) have tasked the governorship candidate of the All Progressives Congress (APC) Mr.Akinwunmi Ambode and his counterpart in the Peoples Democratic Party (PDP), Mr. Jimi Agbaje to address the issue of multiple taxation in the state.

    The bodies also urged the two candidates to come out with a blue print on how to develop the state in the face of dwindling revenues from the Federation Account, the Eko Atlantic City project and how to unlock Apapa traffic gridlock.

    Ambode said he will draw from his experience in the public and private sectors to provide a thriving business economy for the OPS, ensure security of lives and property and create more jobs. He said he will create a N25billion Employment Trust Board that will dole out a million naira yearly to the youth to become entrepreneurs.

    On the Eko Atlantic City he said the 9,000 hectares reclaimed was to create a new city where people can live and work, a financial hub for international business.

    On multiple taxation and ease of doing business in the state, he said the state will harmonise the taxes, negotiate with Federal Government on derivation of taxes and work on factors impeding the ease of doing business in the state by working on land and construction and tax efficiency laws and procedures.

    He said: “The drop in oil revenue means less revenue from the federation account for the state. Usually we get N139 billion from the Federal Government and N260 billion as internally generated revenue (IGR), what we need to do as a government is to ensure efficiency of tax collection by improving the E- Platform, integrate tourism and sports as an income generation stream in addition to building a competitive infrastructure for the private sector to thrive”

    He tasked the Federal Government on the grid-lock in Apapa, insisting that they have not done enough while hailing the State Government for various efforts aimed at unlocking Apapa and the Mono rail which he added will discourage road movement in and out of the Port town.

    Agbaje while criticising the high cost of land and multiple taxation in the state where he alleged only about four million people are paying tax instead of an estimated eight million adults said he will have a robust tax regime where people will find paying tax pleasurable especially the OPS as a result of the enabling environment that will be provided by his administration if voted to power.

    He said: “We will create a new economy base, expand tax base in an innovative way and expand opportunities for people to be gainfully employed so that paying tax will no longer be an issue”.

  • LCCI urges govt on stimuli to cushion economic downturn’s effects

    Worried about the   mono-product oil driven economy, the Lagos Chamber of Commerce and Industry (LCCI) has urged the Federal Government on economic stimuli to cushion the effects of the  economic downturn.

    It also outlined ways for the nation could diversify its revenue sources to boost economic growth and development.

    Its President, Alhaji Remi Bello, said Nigeria must begin to look at other sources of revenue especially when current global oil price has dropped to about $46 per barrel.

    He said: “Period such as this calls for economic stimulus to reinvigorate the economy and expand the frontiers of the non-oil economy.”

    On the 2015 budget proposal, he said the group shared the vision of the government on the need to diversify the economy and deepen its revenue base , adding that the government must intensify efforts at increasing remittances by ministries, departments and agencies (MDAs) to Federation Account, improve tax administration to enhance compliance, address fiscal leakages and corruption and reduce the cost of governance in all  tiers of the government.

    He said emphasis should be on efficiency of tax administration not imposition of new taxes or fees on investors, stressing that taxes must reflect the ability to pay in order to meet its desired distributive role.

    He said: “We advise against imposition of excessive fees and charges on businesses in the name of expanding revenue from non-oil sector of the economy. The government and its agencies should,  refrain from policy choices that could further stifle investments.”

    The LCCI boss said the budget proposal is very significant, coming especially at a time  the economy is facing profound revenue shocks arising from the slump in the global oil prices. He maintained that the budget is also important because it is coming in an election year and therefore has transitional significance.

    “We note and commend the scenario approach to the budget adopted in the light of the volatility of the global oil price. The prevailing economic condition necessitates that the budget should be structured to ensure cost savings, optimal revenue generation, fiscal efficiency and curbing fiscal leakages. “The budget at this time should also seek to create an enabling environment and stimulate investments to ensure the diversification of the economy,” he added.

    On oil price $65 per barrel, benchmark he noted that the proposed by the executive is too optimistic given the current reality of the global oil market.

    He said the fundamentals of supply and demand in the oil market cannot support this benchmark in the short to medium terms, pointing out that currently, oil price is at less than $50 per barrel.

    He said: “The benchmark therefore should be brought close to current global oil market reality, somewhere between $40 -$45 per barrel. Ideally, the benchmark should be significantly below the actual price in order to create room for possible savings and adjustments for volatility shocks.”