By Giwa SHILE
The Lagos Chamber of Commerce and Industry (LCCI) says that strategic policy reforms are imperative in supporting macroeconomic stability for the country.
Director-General of LCCI Mr Muda Yusuf, made the assertion in the chamber’s outlook for 2019 released to newsmen on Friday in Lagos.
Yusuf said that such reforms should include a foreign exchange management framework that would reflect market fundamentals, acceleration of economic diversification agenda and normalisation of Lagos Ports environment.
He said oil and gas sector reforms; especially the Petroleum Industry Bill should be fast tracked.
He also called for reduction in the cost of governance at all levels and improvement in domestic revenue (particularly independent revenue) to reduce volatilities of government revenues.
Yusuf noted that the nation’s economy remained fragile with its high dependence on oil sector for revenue and foreign exchange earnings.
“Although oil revenues increased with recovering oil prices in 2018, the impact on the economy was subdued by the huge foreign exchange commitments to petroleum product importations and the inherent subsidy.
“The high debt service obligations were also major constraints to the growth of the economy,” he said.
He said with limited progress in the ongoing effort to diversify government revenue sources, performance of the oil and gas sector would remain a critical factor in the 2019 economic outlook.
Yusuf quoted estimates from Capital Economics analysts, saying that every $10-per-barrel fall in oil prices would cause a 3 to 5 per cent decline of GDP in most of the Gulf economies.
He said the development would also cause a slowdown of 1.5 to 2 per cent of GDP in Russia and Nigeria on an annualised basis.
He said that growth would depend largely on development in the sector and the political will to undertake far reaching reforms.
