BusinessDay
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Time to diversify ideas and thinking

It is unfortunate that despite the abundant resources in this country, Nigerians find it difficult to feed themselves and their families. It is unimaginable that in a nation blessed with arable land and manpower, small food crops such as a bulb of onion cost as high as N100 in the market. And that is if found at all.

Reason for this is not far-fetched. Following the discovery of oil in Oloibiri and huge foreign revenues it brought, we abandoned agriculture, which hitherto had been the bedrock of our economy. Our leaders ignored several warnings by experts not to concentrate on a single source of income.

While we were revelling in the euphoria of an oil rich nation, other oil producing nations took some resources from oil and invested in other economically viable areas not subject to the same risks as the dominant crude oil revenue.

Harry Markowitz the renowned economist explained in Portfolio Theory that to obtain a balanced portfolio, that is one with the minimum amount of risk for a given desired level of return or revenues, one needs to invest in not less than 20 stocks. Diversification beyond this point makes little difference to the riskiness of the portfolio.

In real life, diversification involves the diversion of presently scarce resources from parties in control today into uses that may benefit others rather than themselves. Resistance is thus guaranteed, and only the interplay of politics and political will can determine the outcome.

Nigeria faces two major problems: one is the chronic lack of investment expertise among our politicians resulting in the saying that “our problem is not money but how to spend it”. The other is a direct lesson from Machiavelli, the Italian Prince, when he said, “there is nothing more difficult to implement than reform”; for reform attacks privilege, of which we have many patrons in Nigeria, and seeks to give voice and opportunity to future generations, either still unborn or too weak to participate at the moment.

While the Federal Government is clamouring for reform, critics are attacking the reform on the basis that implementation would be a problem. However, the first approach to reform should be to open our minds and diversify our ideas and our thinking. In terms of policy formulation, it appears we are not subjecting our ideas and thinking to as much examination and scrutiny as they deserve.

A few examples will do. First: Tourism as a possible foreign exchange earner. We need both local and foreign tourists. Before the foreigners come with their dollars and in preparation for their coming, we can do something about creating and sustaining domestic tourism. Tourism is not necessarily something that occurs in remote locations where there are waterfalls, monkeys, exotic scorpions and wild animals but no natives. Tourists also like to interact with ordinary Nigerians.

Secondly, appropriate pricing for our local produce such as cassava, cocoa, yam, beans etc is necessary. To achieve this, value addition before export is key. Furthermore, efforts should be directed towards renewable energy and locally abundant resources. Rather than kill ourselves over oil money, we can think of renewable sources of energy, such as solar power and wind energy for power distribution. Not long ago, India embarked on wind power development.

Today, she is an important participant in the field. In the area of solar energy we live in a belt of nearly 98% solar radiation day and night. There is good potential for the use of solar power for security lightings etc. as this will decrease the load on Power distribution companies and free some capacity for industrial consumers.

Malaysia uses rubber wood for timber and make export grade furniture from there. Malaysia is also researching on how to make plastic and biodiesel from palm oils. And for houses, no one can beat the Chinese in the use of locally available earth, sands and abundant limestone to build. We can imagine the quantum of job opportunities that would be opened up in Nigeria should we decide to diversify our economy as these other nations.

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