The Lagos Chamber of Commerce and Industry (LCCI) has warned the federal government against squandering a potential 2026 oil windfall on recurrent expenditure, urging instead strengthened policy coordination, fiscal discipline, and investments in infrastructure and diversification.
Speaking to CNBC Africa, LCCI director general, Dr Chinyere Almona, said rising crude oil prices offer Nigeria an opportunity amid geopolitical tensions and inflation, but history shows such windfalls often fuel short-term spending rather than productivity-boosting initiatives.
Nigeria is projected to gain about N6.8 trillion in additional oil revenue in 2026 from the crude price rally, according to BMI’s revised forecast realised recently. The estimate is based on Brent averaging about $78 per barrel, up from an earlier assumption of around $67, and is said to equal about 1 per cent of GDP.
Nigeria’s 2026 budget is primarily anchored on a conservative crude oil benchmark of $64.85 per barrel, alongside a daily production target of 1.84 million barrels per day (mbpd).
“Proceeds from stronger oil earnings should be channelled into the sovereign wealth fund, critical infrastructure and diversification initiatives,” Dr Almona cautioned, emphasising the need to break cycles of wasted commodity booms.
Her remarks highlight Nigeria’s ongoing struggles with high inflation, rising borrowing costs, power shortages, and logistical challenges, squeezing businesses and households.
Her remarks come at a time when Nigeria continues to grapple with elevated inflation, high borrowing costs, weak power supply and logistics bottlenecks, all of which are squeezing businesses and households.
Crude prices have risen sharply since the Iran conflict began, mainly because traders fear disruptions to supply through the Strait of Hormuz, a critical oil shipping route. Early in the conflict, Brent rose from about $72.87 to $83.44, a 15% gain, and later climbed much higher as the fighting expanded and hopes for peace faded.
By late March, Brent briefly touched $119 a barrel, surging more than 55% from prewar levels and peaking near $120.
Almona said one of the key priorities for policymakers should be to ensure that any oil-related revenue boost is used to cushion Nigerians from mounting cost pressures rather than to fuel inefficient spending.
She argued that the windfall could help reduce the government’s borrowing needs, freeing up fiscal space for investments in infrastructure, power and reforms that lower the cost of doing business.
That, she said, would be more beneficial than allowing additional revenue to be absorbed by consumption-led expenditure.
The LCCI chief also pointed to the limitations of recent monetary easing in addressing businesses’ challenges. Although the Central Bank of Nigeria recently reduced its benchmark rate by 50 basis points, she said the move has yet to translate into materially lower borrowing costs for the private sector. Companies, she noted, are still contending with expensive credit, while inflation continues to push prices higher, particularly for food.
Food inflation remains a major concern for the chamber. Almona said the government can do more to tackle inflation through targeted interventions in the agricultural value chain, including improving productivity and addressing insecurity in food-producing regions.
Without those measures, she warned, rising food prices will continue to erode household welfare and intensify pressure on consumers.
Transport costs are also worsening the inflation problem. Higher energy prices have increased the cost of moving goods and people across the country, adding to the burden on consumers and businesses alike. In response, LCCI is urging the government to stabilise energy prices and improve domestic supply, including by expanding refining capacity to reduce Nigeria’s exposure to global fuel price shocks.
Beyond refining, Almona stressed the need to address structural constraints in the broader logistics network. She cited inefficiencies in port operations, multiple road checkpoints, and layered levies imposed on the movement of goods as major contributors to high costs.
These bottlenecks, she said, raise product prices and undermine competitiveness across the industrial sector.
For businesses navigating the current environment, Almona acknowledged that some recent government policy actions have been encouraging. She highlighted the launch of the National Single Window as a potentially important reform that could improve trade facilitation and ease of doing business if effectively implemented. She also referenced new fiscal policy measures and tariff amendments for 2026 that reduced import duties and levies on some goods, including inputs used by manufacturers.
The tariff adjustments, she said, also affected goods such as vehicles, rice, palm oil and sugar, with the potential to ease costs in parts of the economy and, over time, improve logistics. Still, Almona emphasised that the real test lies in execution. Nigeria, she said, has often introduced well-designed initiatives only for weak implementation to blunt their impact.
She therefore called on authorities to focus on implementation timelines, measurable milestones and policy consistency so that businesses can fully benefit from the reforms being announced.
Even with those positive steps, power supply remains one of the most severe constraints on private sector productivity, according to the chamber. Almona said that frequent electricity outages, unreliable distribution networks, high diesel prices, and the high cost of generator use continue to weigh heavily on businesses. She urged the government to deploy part of any oil windfall to strengthen the power sector, arguing that improved electricity is central to any serious effort to boost output, competitiveness and investment.
The LCCI chief also drew attention to concerns about telecom infrastructure, noting that chamber members have flagged repeated vandalism and related security risks. She described telecommunications as foundational to economic activity, supporting banking, e-commerce, healthcare, education and other essential services. Protecting that infrastructure, she said, should be treated as a national priority requiring coordinated action by federal, state and local authorities, as well as regulators.
