LCCI tasks FG on reforms to unlock manufacturing growth

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By Yinka Kolawole

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The Lagos Chamber of Commerce and Industry (LCCI) has called for urgent reforms to address persistent constraints in Nigeria’s manufacturing sector, warning that weak fiscal management, poor budget execution, and structural bottlenecks continue to undermine economic growth.

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President of LCCI, Engr. Leye Kupoluyi, who spoke in Lagos during the Chamber’s quarterly media conference on the state of the economy, stressed the need for improved fiscal discipline and a more efficient framework for capital budget implementation.

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He noted that delays in fund releases, bureaucratic inefficiencies, and poor execution capacity have remained recurring challenges, significantly affecting project delivery and private sector productivity.

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The LCCI president urged the Federal Government to prioritise the resolution of key manufacturing sector constraints, noting the sector’s growing contribution to tax revenues.

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He disclosed that the sector recorded N1.17 trillion in Value Added Tax (VAT) in 2025, representing a 45.61 per cent increase from N803.53 billion in 2024, while Company Income Tax (CIT) rose to N881.29 billion, up by 32.83 per cent from N663.46 billion.

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Despite this growth, Kupoluyi lamented that manufacturers continue to grapple with high production costs, driven largely by unreliable electricity supply, logistics inefficiencies, and policy inconsistencies.

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“Frequent power outages, high generator costs, and unreliable distribution networks are crippling productivity,” he said, calling for accelerated investment in renewable energy and improved grid management.

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The Chamber also raised concerns over high import duties on paper, printing materials, and related inputs, noting that such policies, alongside port delays and regulatory bottlenecks, are inflating production costs across multiple value chains.

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LCCI advocated a comprehensive policy mix, including moderate tariffs, streamlined port processes, and stronger support for local manufacturing, stressing that such measures are critical to reducing business costs, enhancing competitiveness, and driving sustainable industrial growth.

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Kupoluyi further noted that the rollover of N7.71 trillion in unimplemented 2025 capital projects highlights systemic gaps in Nigeria’s fiscal operations and underscores the urgency for reforms.

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“Historical weaknesses in Nigeria’s budget execution capacity, delays in fund releases, bureaucratic bottlenecks, and inefficiencies remain critical challenges,” Kupoluyi said. He warned that failure to fully fund capital projects has far-reaching implications, particularly for contractors and businesses whose operations depend on government spending.

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“When contractors are owed large sums, their operations are stifled, and jobs are threatened. The government must create a new template for capital budget releases to ensure adequate funding of projects,” he added.

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