LCCI warns against new N10.57 loans, urges FG to seek ‘effective alternatives’

The Lagos Chamber of Commerce and Industry (LCCI) has urged the federal government to consider “more effective alternatives” to borrowing, rather than issuing 10.57 trillion naira in new loans to fund a 10,000 deficit. N78 trillion as proposed in the 2023 budget.

The Chamber, in a statement released on Sunday and signed by its Director General, Dr Chinyere Almona, argued that while a budget deficit of N10.78 trillion was not misplaced, however, it was not agreement with the issuance of 10.57 trillion naira. new borrowing to finance the deficit.

The business advocacy body has therefore called on the federal government to adopt equity financing as the exclusive means of financing budget deficits; since it would save the country from paying huge interest payments.

“We are of the view that while all is well with the N10.78 trillion deficit, all is bad with the N10.57 trillion (N8.8 trillion new commercial loans) issuance plan and 1.77 trillion naira from bilateral and multilateral loan draw downs) of new loans to finance the deficit, at a time when we are already placed on the watch lists of some of our overseas bondholders.

“Massive equity financing is the choice we should all urge the federal government to consider now. Nigeria is now expected to use equity financing as the exclusive mode of financing budget deficits.

“If we go to equity financing, we don’t have to pay huge interest and we can use some of the proceeds from our equity issue to pay down some of the debt, make the fiscal situation more sustainable and revive the necessary confidence in our economic and budgetary resilience.

“It is not too late to use equity to finance the 2023 deficit proposal. The current administration should be encouraged to take advantage of the equity choice to leave a legacy on which the new administration can build. as we return to the path of fiscal sustainability as a nation,” the Chamber said.

While commending the federal government for the speedy transmission, review and signing of federal budgets in recent times, the body, however, instructed the federal government and the National Assembly to ensure more timely transmission and enactment. early in the budget this year.

The Chamber also commended the government for the strategic objective of the expenditure policy, which emphasizes macroeconomic stability, human development, food security, improvement of the business environment, energy self-sufficiency. , improving transport infrastructure and promoting industrialization with a focus on small and medium-sized enterprises.

He however advised on the need to improve the performance of the 2023 budget by studying the performance of the 2022 budget, to allow the government to make some corrections in the execution of the new budget.

The Chamber also urged governments at all levels to put in place concrete policies to address high fuel and food costs, noting that high inflation would continue to skew most assumptions and targets. budgets, if not reduced.

While commending the Federal Government for its allocation of N470 billion to revitalize higher education institutions and improve salaries for academic staff, in the proposed budget, the House however called for a more sustainable funding model that would grant a financial autonomy for universities.

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2023 budget proposal: LCCI warns against new N10.57 loans and urges FG to seek “effective alternatives”

2023 budget proposal: LCCI warns against new N10.57 loans and urges FG to seek “effective alternatives”

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