Why Nigerian economy still depends on oil, gas sector – Minister

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Chibuike Rotimi Amaechi
Chibuike Rotimi Amaechi

By Anayo Ezugwu

CHIBUIKE Amaechi, minister of transportation, has said that one of the problems bedeviling Nigeria and other developing economies is the struggle to escape from the clutches of a dominant monolithic sector economy. He said pre-independence the Nigerian economy was dominantly agrarian.

In his keynote address at the 2020 Worldstage Economic Summit, on Tuesday, November 10, on the topic: ‘New Reality: Consolidating Economic Diversification,’ Amaechi noted that the structure of the Nigerian economy remains highly import dependent, consumption driven and undiversified. He regretted that the oil and gas sector has continued to play a significant role in the economy and accounts for 65 percent of total revenue to the government.

According to him, oil and gas sector accounts for 88 percent of the country’s export and foreign exchange earnings, while the manufacturing sector accounts for less than one percent of total exports. According to him, this has made the economy susceptible to uncertainty in the global oil price, which exogenously determines and explains the ceaseless fiscal shock in the country whenever there is a dip in the prices of crude oil and gas.

“This has also contributed to alarming poverty and unemployment rates in the country despite Nigeria’s inherent potential to become a major player in the global economy by virtue of its human and natural resources endowments. Taking cognizance of the current realities and in order to address these challenges, the current Administration of President Muhammadu Buhari, adopted economic diversification as one of the broad strategic objectives of Economic Recovery and Growth Plan, ERGP.

“This entails government’s focus on non-oil sectors as agriculture, transportation, industrialization, science, technology, and innovation, STI, among others. In this regard, the government has made massive investment in agriculture geared towards ensuring food security and job creation. Some of the key outcomes of this initiative are the national self-sufficiency in rice and wheat. Government is making concerted efforts to provide conducive and competitive business environment that will help in revitalizing the industrial sector, especially Small and Medium Enterprises, SMEs.

This is expected to enhance job creation and stimulate foreign exchange earnings. Distinguished ladies and gentlemen, one of the critical areas that is central to actualizing economic diversification in Nigeria is massive investment in transportation infrastructure. Transportation is crosscutting and permeates many economic sectors, facilitates international trades, supports food security, delivers energy and enables industrial and infrastructural development. It generates employment and helps create prosperity, thereby fulfilling critical economic as well as social functions,” he said.

The minister acknowledged that his ministry will play a great role towards diversification of Nigeria’s economy. He said in the computation of the global competitiveness index, the World Economic Forum, WEF, admits that transportation infrastructure is not only key pillars, but also basic requirements upon which other pillars must stand.

Amaechi noted that adequate transportation infrastructure could trigger a country’s economic progress by diversifying production, trade and export. “It is important to note that transportation Infrastructure ranking usually has low economic diversification index. I am glad to inform you that Nigerian government is making tremendous progress in changing the trajectory of the transportation sector in Nigeria from unproductive to a productive and competitive one.

“The government has embarked on implementation of multi-modal transport system and revitalization programme as well as huge transport infrastructure investment across the country. These interventions by the federal ministry of Transportation include massive construction of roads, rail lines with access roads, inland water ports, seaports, new terminals in existing ports, dry ports with access to rail and roads, Inland Container Depots/Freights all geared towards building a modern and efficient transportation system that guarantees sustainable socio-economic development of Nigeria.

“Also of relevance is the development of adequate manpower to ensure efficiency in the Transportation Sector. It is perhaps noteworthy to state that in the Rail Subsector, the rehabilitation of the Narrow Gauge line and construction of the Standard Gauge lines along Abuja- Kaduna, Lagos-Ibadan, Warri-Itakpe recently commissioned are efforts made to provide revenue for the government and provide employment opportunities to the teeming Nigerian youths.

“In addition, government has been making giant strides in the development of National Freight Offices in line with ECOWAS Protocol at the nation’s border town’s to regulate borders and International Road Corridors. Efforts are also being made to put in place proper regulations in the road subsector to provide an enabling and competitive environment for Road Transport Operators.”

– Nov. 11, 2020 @ 13:37 GMT |

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