The Lagos Chamber of Commerce and Industry (LCCI) has called on the Federal Government to boost crude oil refining and petrol export to meet its inflation reduction target and also strengthen the naira.
Speaking to The Tide’s source, President of the LCCI, Gabriel Idahosa, said the 2025 budget of N54.99trillion is insufficient to achieve Nigeria’s broad economic growth targets, including achieving a $1trillion economy by 2030 and reducing inflation to 15 per cent from a record high of 34.8 per cent.
“None of the budget either this year or next year will be enough to achieve the broad targets of growing the economy. This budget is just one of several steps towards that ultimate objective”, Idahosa said.
He stressed that while the government’s inflation reduction target of 15 per cent is ambitious, it can be met with disciplined policies, particularly in the foreign exchange market.
“Some of the targets have been considered ambitious, like the inflation reduction of inflation targets. A lot of observers feel that it is quite ambitious and it will be difficult to attain.
“The government has given itself a very challenging target on inflation reduction. So, we will see how they can achieve it. Everyone is hoping that they can achieve it”, he said.
He encouraged the government to focus on stabilising the foreign exchange to N1,300, noting, “If they can reduce the stable exchange rate from N1,500 to about N1,400 or N1,300 as the sustainable new exchange rate benchmark, then you can see inflation coming down even more than their targets”.
Idahosa emphasised that Nigeria must ramp up local refining and exportation of petroleum products to stabilise the exchange rate and reduce inflation.
“It is very important that we are producing enough and exporting. The more we export refined petroleum products, the lower the exchange rate; typically, the price of the dollar will be coming down”, he said.
According to the LCCI President, a surplus of foreign currency will emerge as Nigeria produces more refined products, alongside an increase in non-oil exports like fertilisers and cement.
He highlighted the role of the Dangote Refinery and NNPC refineries in eliminating petrol imports and turning Nigeria into a net exporter of refined petroleum products.
“We have the Dangote Refinery and NNPC refineries, to give enough for us to completely stop import of petrol. Generally, the surplus of extra foreign currency in the economy is increasing as we produce more refined products and non-oil exports.
“We are already exporting, but we must ensure we stop importing petrol completely”, he stated.
Idahosa projected that inflation will decline throughout the year due to reduced transportation costs, driven by the expansion of Compressed Natural Gas and Liquefied Petroleum Gas vehicles and metro rail projects in Lagos, Abuja, and other cities.
“The metro lines and the gas are very crucial to significantly reduce transportation costs, and that will reduce inflation”, he said.
He also expressed optimism about Nigeria’s economic outlook, saying that a stronger Naira would be achieved as exports expand and the country shifts from being a consumption-based economy to a production-based one.
“We are now recognised worldwide as a producing country for refined petroleum products. The outlook is certainly positive”, he concluded.