The Lagos Chamber of Commerce and Industry (LCCI) has suggested using equity financing as a solution to the country's budget imbalance rather than going on an endless borrowing binge.
Dr. Michael Olawale-Cole, President of the LCCI, called for the reduction of tax and tariff waivers as well as the sealing of revenue leaks yesterday in Lagos at the Chamber's fourth quarterly media briefing on the status of the economy.
“We do not have to make huge interest payments if we embrace equity financing. We can use some of the proceeds of our equity issuance to pay some of the down debt, make the fiscal situation more sustainable and rekindle much-needed confidence in our economic and fiscal resilience.”
According to him, Nigeria’s ability to source foreign debts is already diminished, making it even more imperative to consider alternative sources of funding.
“It is obvious that we may not even be able to source debts from foreign investors as in the past. Many factors have diminished our debt ratings, which should push the government to consider immediate issuance of wholesale equity investment at home and abroad to fund idle assets to finance the deficits instead of borrowing more.”
Also recommending revenue option, he said, “We must immediately block revenue leakages by curbing oil theft, pipeline vandalisation, trimming excessive fuel, power, gas, and forex subsidies, and massive tax and duty waivers to lift revenue to N20 trillion to N30 trillion thresholds from the present N6 trillion to N10 trillion thresholds.”