‘Nigeria’s economy not creating value commensurate to consumption’
The country’s economy has been described as sub-optimising, and not creating value commensurate to resources it consumes. The only solution within, stakeholders say, lie in diversification of revenue and understanding in terms of restructuring, which is yet to be achieved.
Indeed, there is need to diversify export to increase foreign exchange while it is also important to expand government revenue to avoid instances of describing the federal and local councils as mere collectors and distributors of economic rents.
The Managing Director, RTC Advisory, Opeyemi Agbaje, made the submission yesterday at the opening of the 17th yearly international conference and training of the Risk Managers Association of Nigeria (RIMAN) in Lagos.
According to Agbaje, based on government’s economic and recovery growth plan (ERGP), which offers more sustainable responses to the challenges of revenue diversification in Nigeria, borrowing cannot be a sustainable financing strategy for the national economy, just as it cannot be a revenue diversification source.
Agbaje, who spoke on “Imperative of revenue diversification in a challenging economic environment”, noted that given the emerging economic indicators, it is wiser that Nigeria focuses not only on debt to gross domestic product ratio but also on the debt service ratio, which pave way to sustainable strategy for financing.
He said: “In 2016 and 2017, budget amounts to 25 per cent. Debt service equals to total budget and it is deceptive to focus on debt over budget, because the budget itself will lose to debt. Rather we should focus on debt over revenue, which is what we can use to service debt and when you do that, it will rise from 25 per cent to 40 per cent.”
The Oba of Lagos, Rilwan Akiolu II, called for an effective tax system to enthrone a better Nigeria. He said there was need for every state to control its natural resources and remit due quota to the Federal Government.
The president of Chartered Institute of Bankers of Nigeria (CIBN), Olusegun Ajibola, in his remark, said the theme of the conference, “risk management for economic development and revenue diversification”, was essential for robust growth, increased businesses, inclusive growth and development of the country.
He noted that failure to take proactive measures contributed largely to the prevailing insecurity, social and political upheavals as well as cooperate failures, among others.
According to Ajibola, Nigeria needs people who would diligently sensitise the citizenry on management in order to make the concept a tool of growth and development.