From Kayode Abdulazeez, Ilorin
A diversified economy is that which has different revenue streams and provides nations with the ability for sustainable growth. Diversification provides nations with the security and reliability that they need should one economic revenue stream fail as currently being witnessed in Nigeria.
Now that Nigeria’s economy has gotten to the dire straits where all the three tiers of government are now faced with the challenge of paucity of funds to meet basic obligation, the rallying cry of diversification has become a national anthem.
It is no longer news that more than 27 states are owing salaries and pensions while capital projects are bearing the brunt of the times.
The crash in oil prices and the wanton destruction of oil facilities has led to the reawakening about the futility of relying on oil revenue stream.
To some incurable optimists among government officials at federal, state and local government levels, the lost revenues will be recouped in due course.
This category of people find it difficult to think out of box and face the reality of genuine economic diversification. To a few others, the current fiscal crisis is sufficient signal that all is never going to be the same again and their effort towards diversifying the economy is already giving them result. No doubt, diversification needs to be pursued with greater vigour by federal, state and local governments.
Of course, responding to the mood of the times, President Muhammadu Buhari has been preaching the message of economic diversification even at international fora, pledging that his administration would take urgent steps to restructure Nigeria’s economy by encouraging new investments in mining, agriculture and manufacturing.
At a reception in his honour by the Communist Party of China, Buhari said that Nigeria would welcome the support of the Chinese government, foreign investors and local businesses in efforts to diversify the nation’s economy.
A statement issued by a presidential spokesman, Garba Shehu, highlighted the thinking of the administration and stating unequivocally that the diversification of the Nigerian economy was long overdue as continued reliance on crude oil exports had always made the economy vulnerable to shocks.
“This time we will be more deliberate. The government and businesses will be involved,’’ Buhari had said in the statement.
The statement also reported the Secretary of the Communist Party and Governor of Guangdong Province, Mr Hu Chinhua, as pledging that the region would support the implementation of all the bilateral agreements reached with the Chinese government during Buhari’s visit.
It added that Buhari also visited the Sino-Singapore Knowledge City in Guangzhou “which showcases advancements by China in medical, science and technological inventions.’’
The era between 1970 and 1976 represented the first oil boom when the Federal Government went on a spending spree and increased salaries of workers.
Unsurprisingly, Nigerian workers asked for free everything until the 1980s when the price of oil went down briefly and government launched the platitudes of diversification of the economy, a move which was jettisoned again when oil prices rose again particularly between 2009 and 2014 when oil hovered around $100 per barrel for almost five years.
The benefits of economic diversification are clear for any serious and progressive government to embrace. Nigeria today ranks among the most richly endowed nations of the world in terms of natural, mineral and human resources.
Nigeria has a variety of both renewable and non-renewable resources, some of which have not yet been effectively tapped.
Solar energy, probably the most extensive of the underutilized renewable resources, is likely to remain untapped for some time while the vast reserves of natural gas produced with crude oil had yet to be fully utilized with the country’s highly entrepreneurial, hard-working, and largely youthful population of over 70 million people.
Nigeria also contributes over 70 percent of the West African sub-regions’ Gross Domestic Product (GDP). Nigeria is favourably-positioned geographically and not susceptible to the natural disasters many other countries are prone to. Even more, Nigeria is rich in intellectual capacity, with many Nigerians at home and abroad distinguishing themselves among the best in the world in various areas of endeavour.
Furthermore, Nigeria has over 34 discovered solid minerals, including significant uranium deposits, abundant arable land and over 44 exportable commodities. With such an abundance in human and natural resources, Nigeria really should be one of the most diversified and competitive countries in the world.
It is, however, unfortunate that diversification is a subject matter the Federal Government has been reciting as a catechism – ‘thou shall not depend on oil alone,’ a catch phrase it had been bandying for four decades.
Now that the reality has come to light, each tier of the government must now put on its thinking cap to do the needful in meeting the deluge of promises made to the electorate.
