Revamping Nigerian economy

THE call for the diversification of the Nigerian economy has gained momentum in recent times.

Nigeria needs a diversified economy, especially now that the economy has just come out of recession. Many reasons have been adduced for the contraction of the economy, from corruption challenges to low level of employment, high oil prices and lack of saving buffers.

In my opinion, however, the major factor responsible for the current economic situation is inertia on the part of the current administration.

The argument that the government is diversifying the economy has already fallen flat on its face since the rebased GDP, with oil presently accounting for just 10 per cent of output.

What is, however, missing is the specialisation that should come with our areas of comparative advantage.

One of such areas that readily comes to my mind and in which Nigeria has or can develop comparative advantage is agriculture.

Nigeria’s oil reserves are estimated to run out before the end of 2030. But we seem to continuously adopt policies whose goal is to avoid the gains of specialisation.

Specialisation based on a clear understanding of where and how firms in Nigeria can compete profitably and sustainably in the global market is long overdue.

We need to understand that to be successful as a nation, we have to compete in selling our goods and services internationally, not just trading in other countries’ goods and services, and in attracting the investments and necessary skills for the job.

While the evolution of the structure of the economy is the result of countless decisions made by both private and public sectors, the government can set the tone by providing productive incentives, enacting the right laws and investing primarily in public infrastructure that will ultimately translate into competitive pricing of goods and services produced in Nigeria.

No country has ever attained a decent level of development by gifting raw materials and borrowing to buy back the finished goods and Nigeria’s case will not be exception.

Failure to embrace specialisation and domestic value creation is an admission that sustainable growth and development may forever elude Nigeria.

To this end, the Nigerian government must be strategic and purposeful in encouraging and facilitating sustainable growth, employment, wealth creation and good quality of life through focus on areas of comparative advantage, in collaboration with the private sector.

 Victor Aromolaran

[email protected].