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Dire need for diversification of Nigeria’s economy - BLUEPRINT

NOVEMBER 24, 2020

BY  Olanrewaju Oyedeji

Top of discussions in Nigeria after the trending issue of recession is the hike in price of petroleum which stands at N170. This has raised many condemnations with the Nigerian Labour Congress stating there is a limit to what Nigerians can take. However, some Nigerians have written off the condemnation of the petrol price by labour on the pretext that the union had an opportunity to fight against the initial deregulation of the sector by the federal government.

Another school of thought posits that Nigeria cannot survive without deregulating the petroleum sector and then the argument continues. However, the reality is that the bulk of our revenue comes from crude oil, thus if anything goes wrong with the price of crude oil it becomes hard for the country to fulfill its financial obligations. For instance, the 2021 budget was reportedly hinged on a $40/barrel of crude oil. 

In recent times, we have had efforts by the government to ensure localisation in the country and ‘diversification’ of the nation’s economy. The President Buhari administration shut borders and particularly blocked importation of rice, which has led to the country reporting that it had more increase in local production of rice even though the issue of affordability still arises. 

Branding, quality and affordability of the locally produced rice have become subject of concern and with the issues arising from rice production as a component of further economic decisions that the Nigerian government would take in subsequent years, it has become important to note that economic diversification needs not take the shape the government is toeing.

In the process of introducing new policies, the reality still remains that it is unclear if the government is feeling much needed change already or if average Nigerians will continue to suffer from inability to feed comfortably, from the hardship of movement, job insecurities and many more. 

While economic diversification is what we need in Nigeria, there is a need to do it in a realistic way. The decision of the government to deregulate the petroleum sector, increase electricity tariff, shut-down the border under the pretext of economic development is far behind reality and the policy should be reviewed if things will get better. The policies all came at the same periods.

The government has no reason not to increase import duty for foreign rice and give total support to local farmers as a way to boost the local production of rice and still ensure that citizens do not suffer extreme hardship in the process instead of totally shutting land borders. What this affords us is not only more branding and quality competition but also making importation more strenuous which gives more access to local production. 

There are reports that foreign rice is still being smuggled into the country with the debate on porosity of our borders; an issue for another day. Part of what could have been used to fund local farmers would be from the import duties from Importers. 

This is being realistic and not saying Nigerians should endure when even our currency is fast losing value, where job security is not guaranteed and the issue of corruption still persists. We have some Nigerians who even say jokingly but truthfully that the minimum wage cannot buy a bag of rice anymore.

There is a need for the government to put economic diversification on a reality check before taking decisions. Truthfully, the agricultural sector is a juicy one for us if properly managed but while we diversify to agriculture, we should remember that agric produce is consumable and people’s welfare matters.

Ahmad Lawan, the Nigerian Senate President, was quoted as saying that Nigerians should ignore senators’ jumbo pay and focus on their work, meaning even senators are not willing to take pay cuts to make the pain of diversification easier, so if average Nigerians would be asked to be patient and those who take fat salaries cannot take some pains, we must make realistic policies.

The communications and information technology sector is another juicy place but it would take a while to achieve results, so should Nigerians suffer before we achieve needed results while even stakeholders do not want to hear anything like making financial sacrifices?

The issue of fuel price hike will continue to rise especially when efforts geared at diversification are yet to yield fruits due to seeming improper planning and reality check, at least based on obtainable results. Except we plan it well, crude oil will continue to be our major source of revenue and if anything goes wrong, Nigerians will keep paying especially now that we are relying on what the international market says to come up with a price.

While we may be fast to compare ourselves to different countries who took the path of pain to economic prosperity, we have not shown enough willingness to fight corruption, non-accountability, mismanagement, mistrust, ethnicity, tribalism and lots more. While we are working on our rough edges, we must take into cognizance of the survival of the people.

Truthfully, the Nigerian government announced different funds to aid business owners, and they are commendable but not all Nigerians can get the fund and the larger members of the society in the markets, in the streets deserve to enjoy their well-being without having to wait on an application portal result on whether they qualify for funding to survive or not. 

Also, when you get a N50,000 survival fund and it cannot buy much in the market, will you keep running to the government for more money? The effort of the government is commendable but like I have pointed out at opportunities for analysis, it is not enough to have policies but it is appropriate to have proper approaches and implementation strategies.

There is an urgent need for the government to go back to the drawing board and make decisions to ensure that its citizenry can survive the hardship occasioned by Covid-19 and the worsening recession, especially in tandem with making best decision in the interest of the country and at same time in the interest of the people, given our peculiar circumstances.


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