Stakeholders identify options beyond crude oil resources in Nigeria
Petro-chemical, manufacturing, solid minerals, agric among top priorities
Nigerian economy is mono-cultural, depending on a single commodity for revenue generation. Other sectors have been relegated to the background, while the management of oil revenues has proven inefficacious in driving the economy to bring about the needed level of development.
With the recent plummeting crude oil prices and drop in the country’s daily revenue by half, industrialists and experts who gathered at the Lagos Chamber of Commerce and Industry (LCCI)/
PricewaterhouseCoopers (PwC) forum, called on the Federal Government to look beyond crude oil for economic development.
The stakeholders at the forum tagged: “Nigeria: Looking Beyond Oil,” stressed the need for the development of agriculture, manufacturing and petrochemical sector.
Partner and Chief Economist, PwC, Andrew Nevin, projected that the Nigerian economic could be among the top 10 in 2050 with a projected Gross Domestic Product (GDP), of $$6.4 trillion, surpassing Germany, the United Kingdom, France and Saudi Arabia if it gives priority for the development of other sector of the economy.
He listed the other sector to include agriculture, petrochemical and refining, retail and Information and Communications Technology (ICT).
Nevin said: “Nigeria’s intrinsic potentialities lie beyond oil; harnessing these potentialities has become an imperative, given the expectations of lower for longer oil prices. Based on recent trends, our report reviews the impact of low oil prices on key economic indicators and the real sector through an industry survey,” he said.
However, Navin said that the transition to a non-oil economy would not be an easy task. “Based on a 2016 PwC interview of foreign companies across Nigeria, four concerns stand out as challenges with the business environment: corruption, inadequate infrastructure, low skill levels, and macroeconomic uncertainty. In the 2016 Ease of Doing Business ranking, Nigeria ranks 169th (2015:170th) out of 189 economies surveyed. Interestingly, Rwanda jumped through the rankings from being 143rd in 2009 to 62nd in 2016. Over that same period, Nigeria’s ranking worsened as it moved from 102nd to 169th”.
He noted that this means simplifying complex regulation and processes, and eliminating the hurdles that stand in the way of a bigger and more productive private sector. “Our survey highlights the exchange rate as one of the top challenges facing industries in recent times. Capital controls, FX rationing, and restrictions on the importation of certain items are measures the CBN has implemented to preserve the foreign reserves and maintain currency stability,” he stated.
LCCI President, Chief Nike Akande, said that the sustained decline in global oil prices since 2014 has put the nation in difficult position and consequently led to various fiscal and economic challenges such as the drop in foreign earnings, decline in foreign reserves, huge financial bailout for some state governments and unstable macroeconomic environment.
Akande said a holistic and sustainable economic diversification strategy is desirable and in fact, inevitable at this time. “We need to put an end to the high dependence on oil. Strategic decisions and policies that will put the Nigerian economy on a path of sustainable recovery have become imperative.
“Without doubt we need to pay greater attention to manufacturing, agriculture and agro allied industries, solid minerals, ICT, entertainment, tourism and many other areas in the non-oil sector,” she added.
Vice President Yemi Osinbajo, who was represented by a Senior Special Assistant, Dr. Jumoke Oduwole, said the topic of the forum was in line with President Muhammadu Buhari administration’s determination to boost economic growth through effective policies.
According to her, the administration was already making important strides to actualise the administration’s commitment in delivering the change agenda.
“Indeed, we are repositioning the economy for exclusive growth and successful development by getting the fundamentals right be it fiscal, monetary, trade and investment policy reform,” he said. Osinbajo, added that the administration remained committed to diversifying the economy away from over-dependence on oil and creating an enabling environment that will aid private sectors set goals and development.
“We are investing in critical infrastructure, embracing and encouraging the private sector and advocating for greater inclusion particularly through job creation. To attain this, our administration is prioritising key areas such as industrialisation, agriculture and agro-allied processing and solid minerals. We are determined to diversify this economy through export promotion, our support in promoting local raw materials and pressing needs for made in Nigeria goods,” Osinbajo said.
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