The Lagos Chamber of Commerce and Industry (LCCI) says some of the assumptions in the proposed 2025 budget are unrealistic.
The chamber noted that the expectation of a 51 percent inflation rate drop within a year is not realistic due to mounting fiscal challenges.
The LCCI in a statement by its Director-General, Dr Chinyere Almona, asserted the 2025-2027 Medium-Term Expenditure Framework set unrealistic targets.
The government announced it plans to spend N47.9tn in 2025, representing a 36.64 per cent increase from the N35.06tn budgeted in 2024. This makes it the largest budget in the country’s history, but the LCCI has argued it is anchored on shaky economic assumptions.
However, Almona pointed out that assuming an inflation rate of 15.8 per cent for 2025 does not align with the current inflation rate, which climbed to 33.88 per cent in October 2024, stating “The assumption of an exchange rate at N1,400 is too fragile to work with against the current average of above N1,600 to a Dollar in both the official and parallel markets.
“Assuming an inflation rate at 15.8 per cent does not reflect the unabating factors pushing up both the headline and food inflation. With inflation rising to 33.88 per cent as of October 2024, it is unrealistic to assume a steep 51 per cent crash within a year," the statement said.
The chamber also noted its concerns about the country’s rising debt obligations.
The LCCI noted that the budget indicated debt servicing is projected to rise by 91.2 per cent to N15.38tn, accounting for 32.1 per cent of the total budget. The fiscal deficit is pegged at N13.08tn, with new borrowings of N9.22tn, even as federal debt stood at N134tn as of June 2024.
“This level of debt servicing is unsustainable,” Almona warned, urging the Federal Government to adhere strictly to the Fiscal Responsibility Act and limit Central Bank Ways and Means Advances to 5 per cent of revenues.
The LCCI emphasised the importance of creating an enabling environment for private sector growth and prioritising sectors that can stimulate economic recovery.
Almona recommended increased investments in food production, power supply, and measures to combat insecurity, describing these as critical drivers of inflation, exchange rates, and unemployment.
She also called for greater attention to climate change adaptation, highlighting the destruction caused by recent climate-related disasters: “We expect legislative arms at all levels of government to appropriate more funds to tackle climate change adaptation and mitigation nationwide.”
The LCCI urged the Federal Government to harmonise monetary and fiscal policies, reduce youth unemployment through skills acquisition, and empower small and medium-sized enterprises to address current economic realities.
“The Federal Government must prioritise clarity of policy direction and fiscal discipline to achieve the projected GDP growth in 2025,” Almona concluded.
This statement comes as Nigerians grapple with rising living costs and an uncertain economic outlook, placing pressure on the government to adopt more realistic and sustainable strategies.
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