As Nigeria’s economy continues to feel the hit of dwindling revenue occasioned by plummeting oil prices, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has asked the incoming administration to make more investments in the non-oil sector to diversify the economy and ensure the country achieves inclusive growth.
The chamber, which is an umbrella body of all chambers of commerce in the country, said more capital investments were needed in agriculture, manufacturing, solid minerals and transport to steer the growth of the non-oil economic drivers.
“Government needs to work assiduously towards making the required investment that would boost the growth of other non-oil sectors such as manufacturing, agriculture, solid minerals development and transport, which hold greater prospect of yielding huge revenue to the economy if properly harnessed,” said Bassey E.O Edem, acting national president, NACCIMA, who spoke in Lagos last week while reviewing the Ist quarter of the year.
Research has shown that the country has $300 billion infrastructure gap, while the solid minerals sector still contributes less than two percent to the GDP. The sector is not yet opened up owing to constitutional and finance issues that drag investments, according to Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI).
Investments in the manufacturing sector has declined 15 percent year-on-year in the first half of 2014, falling from N566.33 billion to N483 billion, according to data obtained from the Manufacturers Association of Nigeria (MAN), analysed by BusinessDay.
The impact of general election, weak naira, oil price dip and possible policy reversal, among others, may see investments in the first half of 2015 in manufacturing nosedive, according to analysts.
The agric sector is also short of value chain investments as over 50 percent of produce are still lost through the channel, say industry players.
“This is why it is urgent and of great priority for the incoming government to intensify the diversification of Nigeria’s economy and avoid the negative consequences of volatile oil prices,” said Bassey.
Bassey said the chamber had been very consistent in warning against over-reliance on crude oil export as a major revenue source given that oil prices had always been prone to volatility due to OPEC quota, unrest in the Middle-East, demand substitution and vandalisation.
He counselled the Central Bank of Nigeria to reduce the Monetary Policy Rate (MPR) to single digit to cut lending rate.
“There is also a need to pursue macro-economic policies, including fiscal prudence which is supported by good monetary policy to contain inflation at single digit,” he admonished.
ODINAKA ANUDU
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