LCCI: Tinubu’s first year in office plagued by inflation, soaring debt and declining real sector

An analysis of key economic indicators for the past year by the Lagos Chamber of Commerce and Industry (LCCI) showed that Tinubu’s first year in office was marked by rising public debt, soaring inflation and interest rates, weakening Naira and declining performance of manufacturing, agriculture and telecommunications.

The LCCI in its ‘Scorecard for the Tinubu administration after one year’ said the economy was in adjustment mode “with several variables such as persistent inflation, persistent depreciation of the Naira, supply chain disruptions due to insecurity and a weak manufacturing base defining perspectives at a given moment.”

LCCI Director General Dr.Chinyere Almona said that while the policy decisions of the monetary and fiscal authorities have been liberal, the expected results are yet to be recorded.

Almona said: “The fight against inflation has not been successful as commodity prices continue to rise and the inflation rate has increased from 22.22 percent. in April 2023 to 33.69 percent in April 2024, registering over 10 percent growth in 12 months.

She added: “Nigeria’s debt stood at N97.34 trillion ($108.22 billion) at the end of 2023 compared to N87.38 trillion ($113.42 billion) at the end of June 2023. This represents an increase of about N10 trillion. The total increase in public debt is reflected in domestic and external debt.”

Commenting on the impact of fiscal and monetary policies on the manufacturing sector since the inception of the Tinubu administration, LCCI said the manufacturing sectors experienced fluctuations in growth rates during the 2023 and first quarter of 2024 quarters, reflecting both challenges and opportunities.

According to the chamber, “The first quarter of 2024 brought some challenges, with nominal GDP growth slowing to 8.21%. Every year. Quarter-on-quarter growth was negative at -17.67 percent, reflecting a decline. Despite this, the sector’s contribution to nominal GDP remained significant and amounted to 14.79%.

It recommended that the government “address currency crises, adopt a lower exchange rate for import duties on imported raw materials for manufacturing purposes, offer preferential interest rates to manufacturers in the face of shrinking credit to the private sector, and provide stability and predictability” to improve the fortunes of the manufacturing sector.

It further said that during the first year of Tinubu’s administration, the agricultural sector was mainly affected by insecurity, removal of fuel subsidy and continuous exchange rate depreciation, which increased the cost of fertilizers and other production costs.

Olawale Ajimotokan, Chuks Okocha, Deji Elumoye, Sunday Aborisade, Juliet Akoje and Dike Onwuamaeze