The Federal Government has been recommended by the Lagos Chamber of Commerce and Industry (LCCI) to find ways to increase domestic manufacturing to resolve the ongoing supply chain issue that resulted from the Russia-Ukraine war.
This was said by the chamber’s president, Asiwaju Michael Olawale-Cole, during his remarks at the Lagos-based LCCI quarterly state of the economy press conference.
Olawale-Cole claimed that the conflict between Russia and Ukraine had unpredictably continued since February. This had stoked deeper concerns about a deteriorating food shortage and rising poverty levels. He noted that there was a chance that supply chain interruptions may last the rest of the year.
He asserts that the war casts a bleaker picture for the world economy, particularly Nigeria, for obvious reasons. He asserted that the government should increase domestic production of previously imported commodities to satisfy domestic demand and implement the most sustainable approach.
He said, “In preparing for the reality of our near future, we urge the Federal Government to take seriously the completion of projects like the Trans-Saharan Gas Pipeline, a planned natural gas pipeline from Nigeria to Algeria. With this, we can explore the opportunity of exporting gas to Europe in the long term.
“We should also target Trans-Saharan and European markets with the ongoing construction of the Ajaokuta, Kaduna, and Kano Gas Pipeline, popularly known as the AKK Gas Pipeline. Arising from the calamities of this war, Nigeria can explore emerging opportunities to earn huge foreign exchange inflow in the medium to long-term.
“We reiterate our recommendation that refining our crude remains the most sustainable option especially when we consider the huge cost of subsidies on government finances. In refurbishing the refineries, the government should consider the joint venture model similar to the Nigeria Liquified Natural Gas model.”
Regarding Nigeria’s trade balance, which had a surplus of N1.2 trillion, the chamber advised the federal government to invest more in export infrastructure, improve and automate port operations, lowering high production costs, and boost the supply-side of the foreign exchange market to increase liquidity and make it easier for people to access foreign exchange.
“We need to also diversify our exports by boosting our local refining capacity, production of petrochemical products, and accelerating reforms in the Oil & Gas sector to attract more foreign investments in the coming months,” the LCCI president said.
