Diversify economy for growth, group tells govt
WITH sliding profile of crude oil price in the world market, analysts have again prescribed effective diversification of the nation’s economy currently dominated by the commodity.
Indeed, a group, under the aegis of Forum for Inclusive Nigerian Development (FIND), stressed that the current political campaign should be focused on strategies that would achieve this diversification agenda.
At the forum organized by FIND in Lagos last week, the Chairman of the session, Prof. Wale Omole, said the nation should not this time around, miss the opportunity of actualizing this all-important economic agenda.
Omole, who was the Vice Chancellor of Obafemi Awolowo University, noted that nations like Indonesia and Malaysia actually picked from Nigeria’s agricultural template in the early 1960s to leapfrog into their current economic status.
According to him, value addition currently holds the ace in advancing the economic diversification programme, especially with its concomitant multiplier effects.
Specifically, he stressed the need for a paradigm shift from raw commodities exportation to value added offers in the global market by Nigeria
He decried the current practice of crude oil export, saying the refineries need not only be reactivated, but have their respective capacities expanded, with private sector’s inputs.
Also, he said the nation should pursue agro-allied industrialization policy that would ensure local processing of farm produce.
Besides, he called for the exploitation of the nation’s vast mineral resources, under similar values addition agenda to further advance fortunes of the economy.
Also, in his presentation at the forum titled “Diversification of the Nigeria Economy a Call to Action”, Mr. Henry Ademola Adigun, painted a visual picture of the pathetic state of the Nigeria’s wherewithal, which revenue base is solely from crude oil put at 75 per cent, with states generating only 15 per cent internally, but now made worse at instance of the falling oil revenue.
Adigun, who is the Team Lead, Accountability, Facility for Oil Sector Transparency in Nigeria (FOSTER), noted the fact that Nigeria is endowed with oil and other mineral resources, which gave rise to endless opportunities that investors are tripping for, but lamented that the country’s misfortune was stemmed and is continually aggravated by poor management.
However, he was quick to point out that oil revenue, not minding how judiciously it is managed presently, cannot be sufficient for today’s Nigeria, hence the need to diversify.
He pointed out that the group is calling for a new conversation about Nigeria’s future, so that Nigeria’s leaders and citizens together can recognize that the economy has already diversified beyond oil; that the government needs to reduce its dependence on oil for revenue.
Also, that there was need to create a new social contract, where citizens pay fair taxes, and government delivers quality services and makes wise investments; make government taxation and spending more transparent and accountable; and build a culture in which citizens regularly pay the taxes they owe and hold the government accountable for spending their money well.
They rallied Nigerians to join in the diversification process by creating smart, evidence-based plans to support economic diversification; ensure that those plans are developed and implemented with public oversight; and the government should move from direct ownership of economic assets to regulating private sector investment.
Also, they advised that there is need to make complementary investments in public infrastructure and human capital and mostly, diversify revenue sources by broadening the tax base and collecting taxes efficiently, transparently and fairly.
Investing for growth, especially in key sectors that would promote rapid economic development, according to the group, would mean adequate provision for electricity generation and distribution, railways, telecommunications and Internet broadband, efficient domestic refining capacity, effective banking system, well funded education and healthcare sectors.
To boost private sector investments that would in turn complement government’s efforts, FIND reiterated that government ownership in the sector must reduce significantly- at least to minority stake, while it should be absolved entirely from the management of any key businesses in the sector – directly or indirectly.
They advocated fiscal incentives for new entrants post-reform; strong independent regulator; ensuring a business-friendly environment such that there would be attractive new investment– local and foreign.
Efforts must also be increased to ensure that the size of the industry must grow significantly; create a lot of new jobs; and provide incentives that would make the sector to pay more taxes to the government.