Thursday, 30th November 2023

Osinbajo: Rallying private sector for economic resurgence despite challenges, COVID-19 restrictions

By Olawunmi Ojo
01 August 2021   |   4:10 am
Though Federal and State governments and various agencies have so far managed the COVID-19 outbreak in Nigeria with a view to minimising its adverse effects on lives and livelihoods...


Though Federal and State governments and various agencies have so far managed the COVID-19 outbreak in Nigeria with a view to minimising its adverse effects on lives and livelihoods, the pandemic-induced economic challenges have continued to bite harder on Nigerians amidst other challenges facing the nation. With rising inflation rate, unstable global oil price, continued depreciation of the Naira against the US dollar and pervading atmosphere of insecurity currently enveloping some parts of the country, citizens’ lamentations and demand for better governance and improved living standards have been sustained.

The worsening economic situation, which experts have identified as been responsible for rising crime rate, recurring abduction and killing of innocent people, keeps dampening hope among the population. And as the situation deteriorates by the day, the nation’s unity is also threatened, igniting calls for secession by some separatists. On another hand, thousands of despairing youths keep struggling to get out of the country in search of the Golden Fleece.
Long before the outbreak of the COVID-19 pandemic which has claimed millions of lives globally, experts had identified corruption, fall in crude oil prices, overreliance on crude oil, lack of economic diversification, the spate of violence among the constituent units, lack of policy directions on the part of the government, and greed as the major causes of Nigeria’s economic problems. But the global economic effect of the deadly COVID-19 pandemic is currently taking its toll on the nation’s monolithic economy.

Indeed, Nigeria is endowed with abundant natural resources ranging from solid minerals (crude oil, gold, tin, iron ore, niobium, lead, zinc, limestone, salt and the like) to arable land with varieties of agricultural products such as palm oil, cocoa, groundnut, beans, melon, corns and rice, among others. Undeniably, before the emergence of oil, which was responsible for the nation’s focal shift from being an agricultural dependent country to an oil-dependent nation, the hub of Nigeria’s economy before was agriculture. 
But the oil boom era of the 1970s made Nigeria a victim of a monolithic economy without corresponding policy that will prop it for steady and encompassing growth. Today, oil revenue accounts for almost 90 per cent of the nation’s gross export revenue, leaving a paltry 10 per cent to other commodities such as agricultural produce and solid minerals. 

From the 1970 oil boom era to date, heavy reliance was on oil revenue. With fluctuation in oil prices and subsequent sharp decline in price in the recent periods, it is evident that over-dependence on oil as a major source of revenue could fail the country, what with its inability to finance the budget as usual. 

In 2014, the U.S announced its reduction of purchase of crude oil from Nigeria. This made the country drop from the 5th to 6th position as one of the major suppliers of crude to the U.S. According to Olivier Jakob, a Swiss-based consultant, “it’s a very plausible scenario that one day the U.S won’t need to import crude oil from Nigeria as the U.S is awash with light crude. Nigeria crude may need to be placed at a discount to go to new markets in Asia.”
But despite the plethora of economic and security challenges, Vice President, Professor Yemi Osinabjo, regarded by many Nigerians as a pivotal figure in President Muhammadu Buhari’s administration, believes that there is light at the end of the tunnel and that the nation could still find her out of the doldrums. 

The Vice President at different occasions, especially at events he attended last week, expressed hope that there were ways out of the nation’s economic conundrums, saying that challenges brought by COVID-19 and other factors were not insurmountable, especially when the right strategy and approach were adopted.

While speaking at the formal launch and sensitisation workshop on the National Leather and Leather Products Policy Implementation Plan in Abuja, Prof Osinbajo emphasised the need for economic diversification. He added that with planning and optimising the value chain, the industry could become a game-changer for Nigeria’s economy by improving the foreign exchange earnings, boosting growth, and providing employment for young Nigerians.
Noting that Nigeria was yet to fully maximize her potentials, particularly in the leather value chain sector, despite exporting millions of semi-finished and finished leather products to destinations including Italy, Spain, India, South Asia and China, the VP said the country was one of the highest producers of leather and finished leather products in Africa with projected revenue of US$1 billion by 2025.
He said: “The leather value chain is extensive. It includes animal husbandry, tanneries, finished leather products and leather products marketing. The leather and leather products industry currently employs over 750,000 workers with about 500,000 workers in the finished leather goods sector. About 11 leather-exporting companies have been active at the upstream end of the leather value chain.

“Also, the export of leather has grown steadily, reaching a peak of $117 million in 2018. Exports fell in 2020 largely due to the pandemic, but to date, are still in the order of $272m.” 
Corroborating the VP on economic diversification, the Lagos Chamber of Commerce, LCCI, in one of its recent reports, said Nigeria could rise from being the largest economy in Africa and 22nd globally to the top 10 in 2050 with a projected GDP of US$6.4 trillion, surpassing Germany, the United Kingdom, France and Saudi Arabia through diversification from the economic over-dependence on crude oil alone.
The LCCI also said that potentially, Nigeria’s global agriculture exports could take off at a rate similar to Brazil’s, with US$59 billion in export revenues by 2030. “Similarly, values added to Oil and Gas output need to urgently improve by implementing diversification within the sector. This requires investments across the downstream sector to develop petrochemicals, fertilisers, methanol and refining, industries relevant in both industrial and consumer products, which Nigeria currently imports. 

The chamber also estimates that Nigeria’s agriculture exports could reach US$59 billion in 2030 if current reforms are sustained, implying a growth of 9.6 per cent per year. This, LCCI said, will require raising yields through greater use of fertiliser, seeds and mechanised implements, and increasing the amount of land under cultivation,” the report stated.
As the nation continues to battle with COVID-19 economic effects, the Vice President has also opined that a digital hospitality platform could provide a major avenue for other small businesses in the value chain to grow. He said the platform has the potential to help revive Nigeria’s hospitality industry in general, especially in the aftermath of the COVID-19 global pandemic.

Speaking at the official launch of “Aura” by Transcorp Hotels PLC, Osinbajo said the digital platform is designed to connect people to quality accommodation, great food, and awesome experiences in several places.

At the event, which was also attended by the Speaker of the House of Representatives, Femi Gbajabiamila; Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami, SAN; Minister of Labour and Employment, Dr. Chris Ngige; the Deputy Chief of Staff to the President, Mr Ade Ipaye; Chairman of Transcorp Group, Mr. Tony Elumelu; among other dignitaries, Osinbajo stated that a digital innovation like Aura could make a difference, having found the app easy to navigate, with a copious offering of hotels, short-let apartments, and experience tours.

Osinbajo said: “This is an excellent innovation, a service that leverages smoothly on technology and will be a tremendous boost to the hospitality industry. And because I have checked it out myself, I can say that my Aura experience has been quite good.
“Yes, there are several digital hospitality platforms already, but I think the unique offering here is that Transcorp, possibly Nigeria’s foremost luxury hotel, is putting its huge reputation behind the service of helping customers choose the best accommodation, restaurants, and experience tours available in Nigeria. The advantages of this service are varied. 

“First, the customer can rely on the experience and judgment of world-class personnel at Transcorp in choosing hotels and restaurants. Second, Transcorp helps to build other smaller hospitality businesses, and even those simply offering their apartments simply as short-let apartments, by recommending their accommodation to potential guests. A Transcorp recommendation is more or less an accreditation that the accommodation or other hospitality service meets the high standards for which Transcorp is known. This is great all around and will help revive the hospitality industry, especially since the downturn in the aftermath of COVID-19.” 

Prof. Osinbajo commended the Transcorp team for designing such a digital platform. “They lure you into it by showing you a photo of an incredibly mouth-watering meal, and I saw a few that almost convinced me to break my fast early. So, there was an amazing looking Chicken Cheese Pizza from Barnyard lounge in Asaba, some irresistible chicken meal – a 5-star chicken – from Platino in Lagos, and some ‘carry go suya’ spice prawns at 355 here in Abuja. So, from the photo of the meal that takes you to the restaurant itself, you have booking options, dine-in, pick up or delivery.” 

Harping on how innovation could contribute to the economy, Mrs. Olusola noted that, “Aura is an opportunity for us to diversify our economy, an opportunity to create jobs and employment, and to develop domestic tourism and leisure travel.” 

Although it is almost a Herculean task at this sensitive time for anyone in government to speak or appeal to citizens on how best to run the economy, a greater number of Nigerians, especially the experts and the youth still share Professor Osinbajo’s views, having chaired the National Economic Council meeting and supervised the implementation of some economic policies that had impacts on people’s lives. 
They are also optimistic that if some of his suggested ideas, aimed at repositioning the nation’s economy, are given the benefit of the doubt, the nation would experience a turnaround and come out stronger from its travails in no distant time. Given the fact many major achievements and significant milestones recorded under this administration have come from programmes and policies that have been championed or driven by the Vice President, the days of lack of policy directions may soon be over.