The imperative of economic diversification in Nigeria

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Linus Aleke:

The imperative of economic diversification to any nation desirous of economic growth and development cannot be overemphasized; hence the urgent need to focus more attention on developing the non-oil sector of Nigerian economy.

In developing countries like Nigeria, where successive administration had persistently depended on oil as the main stair of the nation’s foreign exchange earner, calls for drastic measures to reverse such indolent practice in the interest of economic growth and progress.

Little wonder why economic observers in the country believe that there is no better time to diversify the nation’s economy than now judging by the perennial decline in the price of oil in the international market.

Some economic analyst also opined that unless government move fast in developing the non-oil sector particularly agriculture and manufacturing sub sector of the economy, the country is fast heading to fiscal doom.

They contended that the overdependence on oil by successive administration following the discovery of oil in commercial quantity in the oil rich Niger Delta had led to the collapse of the vibrant agricultural sector that hitherto decided the faith of the economy and set pace of development in the country.

To this end, the recent prediction by Central Bank of Nigeria (CBN) that the nation is heading into economic recession in the coming year if urgent step is not taken as well as the insinuation in certain quarter that the country is already swimming in economic depression is yet another pointer to the fact that all is not well with the nation’s economy, hence the necessity of the diversification to salvage the already bad situation.

However, despite the infinite lamentation by economic illiterate and expert alike, there seem to be light at the end of the tunnel as few Nigerians, groups and corporate bodies have refused to queue behind those lamenting the woes but are making concerted efforts to help the country navigate the economic mucky waters.

Top on the list of the concerned institution is the Institute of Directors-Nigeria who recently observed through the Chairman, Governing Council of the Institute Mr. Samuel Yemi Akeju in their pre-conference interaction with members of the fourth estate of the realm in Abuja reiterated the need for more investment in the non-oil sector of the nation’s economy.

According to the Institute, “In the face of dwindling oil revenue, there is urgent need for directors and leaders to ensure sustainable investment in the non-oil sector of the Nigerian economy, the case for economic diversification is prime; therefore we want to encourage Nigerian directors and business leaders to rise like their counterparts across developing economies to partner with the federal government in creating avenues of income for national survival and development.

“The Nigerian Annual Directors Conference 2015 with the theme, “Ensuring Sustainable Investment in Nigeria Through Global Best Practices” is the platform provided by our institute to encourage business leaders in developing and developed economies to reach out directly to credible public and private sector leaders on the best ways to establish reliable and sustainable investment in Nigeria, that are mutually beneficial and with great value to the global community.”

However, the institute further observed that for the nation to record the desired appreciable success in the diversification drive of the country, there is need to build the capacity of those who will be responsible for the implementation and formulation of polices aimed at accelerating growth in the non-oil sector.

“To build capacity and competence in the Boardroom, our Institute and the Nigerian Stock Exchange (NSE) regularly collaborate to train directors of companies listed on the stock exchange through the IoD ‘Company Directors Course’.

“We also regularly run effective Public Sector Director Development Programmes for directors of Ministries, Departments and Agencies of government, to help in articulating and performing their duties to government and the society. We are very delighted to note that many directors who have taken part in some of these programmes continue to ask for more.

“In due recognition of the role and corporate activities of our institute as a professional body committed to ensuring that directors discharge their duties to their companies and other establishments they serve and the society. The Financial Reporting Council has rightly acknowledged the institute as one of the professional bodies from which directors may seek registration with the aforesaid body as one of its pre-conditions.”

The President of the Institute Mr. Akeju also cautioned that unless leaders in public and private sector initiate themselves into the cult of transparency and accountability, the above move to navigate the looming economic crunches through continual investment in non-oil sector will be a mirage.

“We recognize and identifies with the thrust of the new federal administration in the areas of transparency, accountability, corporate governance, prudent management of national resources and security of lives and property. This is in consonance with our avowed position to promote the entrenchment of good corporate governance in work places and best practices in the management of resources in both public and private sectors and creating an enabling environment where the best resources can flourish to the benefits of all who live and relate with Nigeria.

“As part of our contribution to nation building, we annually organize an event that is now widely accepted as the largest gathering of directors in Nigeria.”

The institute also shares in the hope that there will be light at the end of the tunnel for Nigeria’s effort to diversify its economy, when they drew attention to World Bank’s prediction on projected rapid economic growth of group of emerging economies which Nigeria is one.

“Data released by World Bank at the start of February this year show that growth for MINT countries in the next three years will be tremendous, confirming the expectations that have been surrounding the four nations for some time: Nigeria and Indonesia could see growth of GDP between 5.5 and 6.00 percent between now and 2018.

“Turkey and Mexico meanwhile will grow at a rate of between 3.3 and 4.0 percent in the next three years, which, though lower than the other two countries is still higher than other nations in their respective areas (only Indonesia is not part of this trend, due to the fact that its areas is full of emerging and competitive nations), Mexico is set to grow at 1 to 1.5 percentage points higher than the rest of Latin America and the Caribbean.

“If indeed, as predicted and projected, Nigeria really belongs to this group, then our leaders and Directors in Every viable area and sector of our national life have a duty to support the federal government in ensuring the realization of the opportunities identified.”

Supporting the aforesaid view, the Head of European Union (EU) delegation to Nigeria and the Economic Community of West Africa State (ECOWAS), Ambassador Michel Arrion advised Nigerian government to diversify its economy with the view to improving her global economic ranking.

“The federal government should develop other sectors, including agriculture, instead of depending solely on the oil and gas industry. The country stands to be the greatest beneficiary of an integrated West African market due to its position as the largest economy in the continent and the industrial hub of West Africa. Nigeria must see the West Africa market as an extension of its domestic economy because she stands to be the greatest beneficiary of an integrated West African market.”

Also giving credence to the foregoing sentiment, the Chairman Nigerian Governors Forum and the Governor of Zamfara State, Alhaji Abulazez Yari Abubakar, in an interactive session with news hunters in Abuja urged federal government to look beyond oil and intensify investment in non-oil sectors of the nation’s economy.

He also made case for the development and exploration of other mineral resources in the country to support the revenue from oil which is in a constant decline.

It is however on this note that one will conclude with a popular English classical saying, ‘A stitch in time saves nine.’ Therefore, all and sundry should support government effort in focusing more attention in non-oil sector investment.

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