Notwithstanding Nigeria’s current economic challenges, there are opportunities for revenue diversification in both public and private sectors, especially with investment in critical areas and stimulation of growth of small businesses.
The position, which was canvassed by stakeholders at the 2016 Standard Bank West Africa Investors’ Conference, with the theme, “Unlocking Nigeria’s potential…growth through diversification”, has become necessary with uncertainty in commodity prices globally.
The nation’s economy has been at crossroads in the wake of the volatility in oil prices, a situation that has now triggered a continuous debate on how best to revive the economy, with the achievement of a balanced, broad-based and diversified growth path that is not subject to fluctuations being advanced.
The Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics, Dr. Yemi Kale, frowned at the practice of describing the structure of the Nigerian economy in terms of government revenue source.
“True, government revenue is dependent on the oil and gas sector but the economic structure of Nigeria is not solely dependent on oil and gas, albeit an important part. If you look at the recent revised national accounts, it is evident that oil value added has been negative for years now, and in fact it is the non-oil sector that had sustained the economy. This is not to say the oil sector doesn’t have indirect impact on the non-oil economy.”
Kale, who said that Nigeria’s economy “is relatively diversified,” however, noted that almost half of the economy is informal and out of the (fiscal) control of government.
“Policies aimed at drawing in this huge informal sector into the system must necessarily be deployed at this time, if we are to diversify our sources of revenue and achieve a more sustainable structural transformation of our economy,” he said.
Chief Executive, Stanbic IBTC Holdings Plc, Mrs. Sola David-Borha, reiterated the need for the public and private sectors to work together to tackle the economic headwinds, especially with worrying predictions of imminent job losses and higher unemployment numbers.
“The need for such partnership underpins the organization of the annual investors’ conference to avail both local and international investors a platform to glean decisive information with which they can make informed investment decisions in Nigeria”, she said.
The IMF Representative in Nigeria, Gene Leon, pointed out that the country has a legacy problem to worry about- oil economy, which contributes 95 per cent export revenue, but less in the economic segments.
“Nigeria needs to implement, communicate, build confidence and credibility. That is the problem that it needs to focus on now. Losses are there, but solutions are there too. When you to implement solutions and fail to communicate, then it looks as if there are no successes recorded that needs to be communicated to people to gain credibility.
“You have to solve a billion dollar problem with a billion dollar solution, not with one dollar solution. Consequently, if you are looking at solving the economic problem, which is more of integrated problem, there must be a set of integrated policies,” Leon said.
The Director-General of DMO, Dr. Abraham Nwankwo, assured that whatever is appropriated to be borrowed to fund national development can be borrowed because the market remains liquid.
He noted that whatever the circumstances are in terms of interest rate and exchange rate policy, the needful must be done within the constraints, to be able to support the budget, adding that observed impediments to national development is more about psychological and structural issues.
According to him, it behoves on all economic agents- household and companies to be optimistic rather than pessimistic, as if Nigeria will collapse today.
“Nigeria is very resilient. We have the resource base, which is deep. These have not changed because we have temporary challenges. We have to be forward looking and every economic agent must begin to think of what it can do to support the structural diversification of the economy,” he said.
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