Experts have agreed that decentralising Nigeria’s export focus from crude oil and gas-related products will promote economic growth.
This was said at a recent public book launch themed ‘SET Project’ organised by the UK think-tank Overseas Development Institute (ODI) and Department for International Development (DFID) United Kingdom in Abuja.
According to Dirk Willem te Velde, David Booth, Danny Leipziger and Ebere Uneze, authors of the paper titled ‘Supporting Economic Transformation in Nigeria,’ in most low- and middle-income countries, the government economic strategies are concerned with setting their countries on a path of economic transformation.
Transformation, the authors wrote, is a process of structural change in which labour and other resources move progressively from low- to higher-productivity sectors and activities. It involves moving resources both between sectors (from agriculture to manufacturing) and within the sectors (from lower- to higher-productivity farms or firms).
Usually, it involves product diversification and new export activities.
The authors argued that product diversification was a more ambitious objective than high growth, and for many countries it was the best or only route to inclusive, employment-intensive growth. Following the experience of countries that have made the breakthrough to transformation in recent decades, the paper noted that transformation require a calibre and consistent policy-making and policy delivery.
“Economic analysis can point to areas where investments would have the right payoffs if given the right institutional and policy support, but political economy analysis provides ample reasons for doubting whether such support would be sustained for long enough to be effective.
“There is an urgent need to identify ways of breaking into this circle, with politically and economically smart interventions capable of attracting the support of reform-minded members of domestic and international policy communities,” read the paper.
By providing analysis and advice and engaging in dialogue with policy-makers and professionals in a number of developing countries, the SET programme commits to tackle the challenge.
“This paper is an output of preliminary work addressed to the policy community in Nigeria in the context of the new hopes and expectations generated by the accession of President Muhammadu Buhari in 2015.
“The paper pulls no punches. It has two principal aims. One is to make as clear as possible the scale and nature of the challenge economic transformation poses to Nigeria. The other is to begin an exploration of ways of breaking into the country’s particularly difficult circle of political-economy factors with transformation-oriented initiatives that are both technically sound and politically feasible,” wrote the authors.
Nigeria, according to the paper, is at a critical juncture where it needs to begin a process of economic transformation.
“A major obstacle to taking the necessary policy steps to initiate real transformation is complacency – a lack of awareness at the highest policy levels of the extent to which Nigeria has lagged behind other countries facing similar or less favourable structural conditions,” read the paper.
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