The Lagos Chamber of Commerce and Industry (LCCI) has raised fresh concerns over Nigeria’s macroeconomic outlook, warning that rising inflation, a growing public debt burden, and expansionary fiscal policies could undermine recent gains in economic stability, despite strong revenue contributions from the manufacturing sector.
Speaking at the Chamber’s second quarterly press conference held Thursday in Lagos, LCCI President, Engr. Leye Kupoluyi, said Nigeria’s inflation rate climbed to 15.38 per cent in March 2026, reversing an 11-month disinflation trend and intensifying cost pressures on households and businesses.
Kupoluyi noted that the uptick in inflation—up from 15.06 per cent in February, was driven by rising food prices, which stood at 14.31 per cent, transport costs at 16.9 per cent, and core inflation at 16.21 per cent.
He added that month-on-month inflation surged to 4.18 per cent, the highest since January 2025, reflecting renewed price instability linked to domestic supply constraints and global energy shocks.
The Chamber also expressed concern over Nigeria’s rising debt profile, which reached N159.28tn as of December 31, 2025, representing an increase of N24.98tn or 18.6 per cent year-on-year.
According to the LCCI, the country’s debt-to-GDP ratio has edged up to 41.5 per cent, with debt service and revenue ratios remaining at uncomfortable levels.
On fiscal policy, the Chamber pointed to the N68.32tn 2026 Appropriation Act signed by President Bola Ahmed Tinubu, describing the budget as ambitious but raising concerns over sustainability and fiscal discipline.
The budget exceeds the initial proposal by over N9tn and is based on an oil price benchmark of $64.85 per barrel.
However, current global oil prices, which have surged to about $115 per barrel due to geopolitical tensions, present a potential revenue windfall.
The LCCI cautioned that without prudent management, such windfalls could be misallocated, urging the government to prioritise savings, infrastructure investment, and economic diversification rather than recurrent spending.
Despite the macroeconomic concerns, the Chamber highlighted strong performance in the manufacturing sector, which contributed N1.17tn in Value Added Tax (VAT) in 2025, representing a 45.6 per cent increase from N803.53bn recorded in 2024.
Company Income Tax (CIT) from the sector also rose to N881.29bn, up 32.83 per cent from N663.46bn in the previous year.
Kupoluyi said the figures underscore the sector’s growing importance to government revenue and Nigeria’s industrial base, but stressed that manufacturers continue to grapple with high production costs driven by poor infrastructure, unreliable power supply, and policy bottlenecks.
On monetary policy, the Chamber acknowledged the Central Bank of Nigeria’s decision to reduce the Monetary Policy Rate (MPR) by 50 basis points to 26.5 per cent, describing it as a cautious but positive step towards easing financial conditions.
However, it noted that borrowing costs remain elevated, limiting access to credit for small and medium-sized enterprises.
The LCCI also observed improving stability in the foreign exchange market, with the naira appreciating to around N1,350.79 per dollar in the official window, supported by reforms, improved liquidity, and better price discovery.
It, however, stressed the need for sustained policy coordination, increased foreign exchange inflows, and a stronger non-oil export base to maintain stability.
Beyond macroeconomic indicators, the Chamber identified several structural challenges affecting the business environment, including weak capital budget implementation, rising telecom infrastructure vandalism, high import duties on paper and printing materials, and persistent power supply constraints.
It revealed that N7.71tn in unimplemented capital projects from the 2025 budget had been rolled over, highlighting longstanding inefficiencies in public finance management.
The Chamber warned that delays in fund releases and unpaid obligations to contractors continue to stifle economic activity and threaten jobs.
The LCCI also called for urgent reforms in the oil and gas sector to boost production and attract investment, urging regulators to adopt fully digital systems to improve transparency and efficiency.
It further emphasised the need to protect telecommunications infrastructure, describing vandalism as a growing threat to economic productivity and national security.
While commending the Federal Government’s fiscal measures, including reductions in import duties on selected goods and the launch of the National Single Window for trade facilitation, the Chamber stressed that effective implementation would be critical to achieving the desired impact on business costs and competitiveness.
On the power sector, the Chamber reiterated that unreliable electricity supply remains a major constraint on industrial growth, calling for accelerated investment in renewable energy, improved grid management, and increased private sector participation.
Kupoluyi concluded by urging the government to adopt disciplined fiscal management, strengthen policy coordination, and implement targeted reforms that will enhance productivity, support businesses, and deliver sustainable economic growth.
He reaffirmed the Chamber’s commitment to continuous engagement with policymakers and stakeholders to promote a more enabling environment for private sector development and national economic progress.
