The Lagos Chamber of Commerce and Industry (LCCI) has urged the government to develop a comprehensive mining-sector strategy to attract mineral exploration investments, reignite mineral development, and accelerate new mineral discoveries, among others for sustainable growth.
Gabriel Idahosa, the president of LCCI made this known in his address on the state of the economy held recently in Lagos when he spoke on several economic issues such as inflation, foreign exchange, and mining, among others.
Idahosa said the organisation wants the government to address the mining sector’s funding issues, and encourage optimal utilisation of Nigerian mineral resources in line with the environmental, social, and corporate governance (ESG) principles for sustainable growth.
“We urge the government to address the sector’s funding issue and increase access to finance to develop value-added products by establishing seed funds and attracting foreign and local investments,” he said.
“For value addition that will enhance local production and job creation, create linkages across the mineral sector and beyond,” he added.
He said to actualise this, the government should consider revitalising the Ajaokuta Steel Company Limited (ASCL) and the Nigerian Iron Ore and Mining Company (NIOMCO) by adopting the best arrangement to free them from all hindrances and ultimately make them operational and viable.
“We have consistently advised that the model of NLNG management can always be adopted with other projects like the ones in the solid minerals sector.
“To ramp up investments in this sector, we need to deploy more relevant research and technology to trace more mineral deposits, refine minerals with value addition to them, and make more statistics available for planning and strategy,” he added.
LCCI also enjoined the government to learn from the hindrances the country is experiencing in the Niger Delta for the failure of allowing small crude refineries to operate under some supervision and standards.
“For the solid minerals sector, we should adopt an inclusive strategy that integrates artisanal and small-scale mining (ASM) policy into a broad rural development strategy aligned with development plans at all levels of government and linked to other national rural sector strategies.
“This will make the solid minerals sector more integrated and linked to other sectors, with more activities that will generate more jobs in rural areas,” he said.
On power and energy transition, LCCI disclosed that it acknowledged that removing the subsidy on electricity supply may have been in line with attracting foreign investors into the sector with a cost-reflective tariff.
But have also advocated that the government subsidise production instead of consumption. The organisation’s primary concern, according to Idahosa, is seeing businesses pay heavily for services they do not enjoy optimally.
“It is a grave concern that with a higher power cost, companies still do not have access to the service. We call for an aggressive metering programme that leads to 100 percent coverage of electricity consumers.
“This guarantees liquidity for the distribution companies and gives consumers more satisfaction with paying for what they consume,” he said.
LCCI observed that the dynamics in the foreign exchange market have continued to depreciate the value of the naira driven by weak supply, uncertainties, and increasing demand’.
Hence, the organisation said that with the naira exchange rate above the N1,500 level against the dollars, the Central Bank of Nigeria may need to rejig its reform strategies towards boosting supply and liquidity in the market.
“We see the possibility of the naira gaining some value before the end of this year. The billions of dollars expected from the sales of marginal oil fields, achieving a higher oil production level, and the possibility of an increase in oil price may all play a role in driving supply to record levels and helping the naira to appreciate towards the N1000 mark.
“We urge the monetary authorities to reconsider a review of the free-floating exchange rate. The depreciation was fundamentally driven by low supply to the market, but speculative activities played a huge role in distorting the real value of the naira,” LCCI stated.
Concerning the prevailing price increases, LCCI said the headline inflation continued its upward trend in June 2024, accelerating to 34.19 percent compared to 33.95 percent in the previous month, while food inflation in June increased by 40.87 percent from 40.66percent in May on a year-on-year basis, implying a 0.21 percent rise.
“The inflationary surge, particularly in food prices, poses a significant challenge to the economic well-being of Nigerians. These inflationary pressures exacerbate the precarious living conditions of millions of Nigerians and further amplify social and economic vulnerabilities,” the organisation noted.
However, the LCCI lauds the recent step the federal government took in approving import duty waivers for food imported for 150 days on selected food items.
“We, however, urge the government to focus more on boosting the supply side and drop the idea of a recommended retail price for food items. In a free market economy, the forces of demand and supply will always determine prices.
“While we support promoting and empowering local production, emergency interventions like this are not out of place since they are meant to fill a gap that local production capacity cannot achieve in the short term,” it said.
