LCCI seeks reduction of oil price budget benchmark to $40
• Decries proposed expenditure for debt servicing
WORRIED by the nation’s ability to sustain its budgetary expenditure due to fluctuating global oil prices, the Lagos Chamber of Commerce and Industry (LCCI), at the weekend urged the economic managers to further review oil price benchmark below the actual price as well as production benchmark.
Besides, the LCCI noted that with possible rise in inflation to at least 12 per cent in the first quarter, the current appropriation for debt service and expenditure structure remains unsustainable.
Indeed, the chamber projected rise in pressures on costs driven by the depreciating naira as well as structural shifts in demand and competitiveness in favour of high local content.
It also expressed a high possibility of erosion of profit margins across many sectors, adding that the emerging weak public sector cash flow will affect general liquidity condition in the economy, but segments driven by public sector patronage will be more impacted.
Addressing journalists on the 2015 appropriation bill and the current economic situation in Lagos at the weekend, LCCI President, Alhaji Remi Bello stated that the prevailing economic situation should assist managers in re-constructing the economy to be more inward looking and more resourceful.
“It is also a great opportunity to curb leakages, rent seeking opportunities and create an environment that rewards value creation. We hope that the economy will also benefit from lower energy prices as been experienced in other parts of the world.
“Fiscal sustainability calls for a review of expenditure at all levels of government. It is easier to cut spending than to raise revenue. We implore the National Assembly to take a critical look at the identified areas in order to curb leakages and ensure cost reduction in government spending.
“Areas to be critically addressed include fuel importation and the inherent subsidy issues; total eradication of kerosene subsidy bringing a savings of N91billion; rigorous review of budgetary provisions for
service wide votes, pensions, capital supplementation, gratuity administration, presidential amnesty budget,
catering and allied procurements, welfare packages
travels, honorarium and other overhead expenses”, Bello said.
Bello further urged government to look inwards at deepening revenue adding that commitment to the regime of austerity measures, cost reduction and economic diversification calls for a major review of the expenditure structure by the National Assembly.