The Lagos Chamber of Commerce and Industry (LCCI) has urged labour unions in Nigeria to re-consider their proposed strike billed to start on Monday, stressing that any reversal of the current reforms in the petroleum and electricity sectors will worsen the country’s challenges.
The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) are mobilising for a nationwide strike on Monday due to the removal of subsidies in the electricity and petroleum sectors, which have resulted in hikes in prices of petrol and electricity in the country. Labour unions say the hikes have inflicted pains on Nigerian workers.
But the LCCI has said that the removal of the subsidies has become critical as the country’s fiscal space can no longer sustain humongous, corruption-prone and opaque subsidies—which are not in the best interest of the citizens, the economy and future generations.
“The country is grappling with a palpable fiscal sustainability challenge. There is mounting public debt which has grown from N12.6 trillion in December 2015 to N31 trillion as at June 2020. This is an increase of 146 percent,” LCCI said in a statement signed by Muda Yusuf, its director-general, on Sunday.
The chamber said Nigeria’s capacity to fund critical economic and social infrastructures had waned considerably because of the opaque subsidies, which could push the country into bankruptcy.
The chamber called for unlocking of the huge private investment potential in the downstream oil sector, especially in petroleum product refining, to reduce importation of petroleum products and ease the pressure on the foreign exchange market and on foreign reserves.
“It is important to eliminate the patronage, rent seeking activities and corruption that currently characterise the downstream oil sector, and create quality jobs for the teeming youths of the country in the downstream oil sector as investment in the sector grows exponentially,” LCCI noted.
The chamber further said the proper electricity pricing would attract private capital that could guarantee sustained improvement in electricity supply.
“Attracting private capital requires that pricing must be right to ensure that the economics of investment makes sense to the investors.
“There is a risk of total collapse of the electricity sector if the sector is left entirely in the realm of public sector.
“The success story of the private sector-driven transformation in the telecoms sector could be replicated in the power sector and the petroleum sector if an appropriate policy environment is created,” it stated.
The LCCI called on the government to urgently put palliatives in place to cushion the effect of the fuel price and electricity tariff hikes on the vulnerable segments of the society, urging them to properly target the recipients of the palliatives.
“The LCCI appeals to labour to engage the government on poverty or hardship mitigating measures to cushion the effects of the price and tariff hike. It is equally paramount to ensure an effective regulatory framework in the electricity and petroleum downstream sectors to protect citizens from exploitation,” the Lagos chamber said.
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