The diversification of the Nigerian economy has already taken place without we realising it because oil which we all talk about actually contributes about 7.32 percent to GDP. In 2018, the agricultural sector contributed 21.2 percent to overall economic activity, other industrial concerns outside oil contribute 18.5 percent and services are 52 percent. The problem remains both exports, and government revenue. Oil accounts for more than 80 percent of all the government’s revenue and nearly 98 percent of all the export earnings. It is also not much different in terms of who Nigeria employs. Industry, which includes the oil sector, accounts for just 11.55 percent of all the people working in the formal sector in the country. Agriculture accounts for 36.38 percent, while services, which includes trade, our second largest employer of labour, accounts for 52.07 percent. This is the best time to be intentional about diversifying government revenues.
The arrival of the International Monetary Fund’s loan to the federal government does not come without its own strings, one of which is the cutting down of the already bloated civil service in an era where the government already finds it hard to pay its workers. This runs into some of the recommendations of the Oronsaye Report. Unemployment, which had a rate of about 23.1 percent the last time there was a survey, has surely gone up in the two years since. Nigeria has also been rated as the poverty capital of the world with an estimated 87 million people living on less than $2 a day. These figures are sure to rise as the government downsizes, and many political appointees get thrown out of redundant jobs, well, except if you’re Cross Riverian and your governor is Ben Ayade.
There is a lot of social unrest that can accrue as a result of this as the One Million Boys menace in Lagos and Ogun states showed. The authorities must consciously channel quick and practical investments in driver sectors such agriculture (not the farming end, but the value-add end), manufacturing, and trade, which are expected to create more jobs, generate badly needed revenue and increase the country’s GDP. The non-oil sector needs to be prioritised, and the growth of the financial services sector is a good place to start. We have seen the influx of fintech companies who have seized the initiative to thrive and create stiff competition for the banks. These need to be encouraged.
Nigeria needs to create easy credit access for small businesses, create real opportunities for medium-sized businesses to expand, modernise the agriculture sector and look into rejuvenating the textiles industry. Tourism is known to fetch much revenue for countries; hence, the Nigerian government must ensure it has a coherent strategy, a decent environment to encourage the industry’s growth and allow businesses to operate independently without much restriction through rigid policies.
It is time the government reduced its involvement in economic production to give room for the free flow of ideas to drive the economy. As the pandemic continues to spread many people are adjusting to what it means to put their lives on hold. While many in the workforce have pivoted to remote arrangements, Nigeria needs to learn from this and ensure technology is encouraged in every sector. The budding tech ecosystem in Yaba is a goldmine that needs to be tapped into for maximum impact. Added to this is the necessary regulatory support that must be provided to network infrastructure providers
As oil depletes, we need to start thinking about clean, renewable energy from natural gas. The results from COVID-19 lockdowns have clearly illustrated how much human and industrial activities affect our planet. For the first time in 30 years, communities in Punjab, India, could see the Himalayas from over 100 miles away and China’s carbon emission fell by 25 percent, all due to reduced pollution. Hence, while there are concerns that low oil prices will make fossil fuels more competitive compared to renewable energy; in the long-term, the oil and gas industry is sure to be significantly affected by a change in consumer behaviour and government regulation that will lead to increased demand for sustainability. There is an opportunity for renewables to become a gamechanger for Nigeria, an opportunity which comes with the possibility of being an African and world leader in driving innovation in this industry.
All of the aforementioned will not happen if we do not take advantage of present adverse conditions. Over the course of the last sixty years, we have had many crises that have presented golden opportunities for Africa’s largest economy to pivot to a more sustainable and economically rewarding path for its people. As we stand on the cusp of our diamond anniversary, it is imperative that we do not waste this chance to rewrite our history.