Covid 19: Time to diversify Nigeria's Economy.  

 Covid 19: Time to diversify Nigeria’s Economy.  

Business Issue

Now Nigeria is facing severe  challenges. Oil price volatility is accentuated by rising commodity prices, possibly  the devaluation of the naira against the U.S. dollar. Time for economy diversification 

 

Covid 19: Time to diversify Nigeria’s Economy.  

 

By Abba Dukawa

 

 

Following the collapse of crude oil prices from 2014 to date , which triggered unpleasant memories to  Nigerian government  as it  found itself in trouble waters of economic dimension. Since then It continues to struggle to revive the economy amidst dwindling oil revenues compounded by unemployment, poverty and insecurity. This crisis is largely  due to over dependant  on oil as a viable means of  survival as the  population growth remains another factor intimidating the people and the economy of our father’s land.

Taking into consideration the extent this mono-cultural economy has negatively affected the nation, the fundamental question will be who is responsible for this economic abnormality? If the truth must be told, the    Provocative economic policy of our elite with the historical abandonment of agriculture and other mineral resources which place undue emphasis on oil is largely responsible.

Nigeria, the so called  Africa’s largest economy, cannot currently fund its budget due to Covid 19 because,  the budget passed with a benchmark of oil price of $57 per barrel  now  nearly doubles  its current price of around  $28. It is thus obvious that, the collapse of oil prices has  posed  a strategic danger to the global economy. It has also  placed the  Nigeria’s economy development on a dangerous  pedestal with ominous signs.

Absolutely, there is lack of foresight  on the part  our leaders. Their failure to  save as much as possible, was high was a manifestations of their inability to plan ahead.  Today, Nigeria Forex reserve is $37billion. This can only finance 4months of imports max and Nigeria technically has $2,2billion.

Even  before Covid 19 pandemic, Saudi threw OPEC members under the bus because Russia refuses to cut production to prop price up. Saudi flooded the market and offered discount to buyers. Russia refused production costs because it thinks; cuts empower Shale producers in America. Now Nigeria have about 50 cargoes of oil floating on international waters without buyers. A cargo contains about 2 million barrels of oil.

Now Nigeria is facing severe  challenges. Oil price volatility is accentuated by rising commodity prices, possibly  the devaluation of the naira against the U.S. dollar. Time for economy diversification

Notwithstanding federal government trying to diversify the  country economy but  non-oil sector growth has not translated to improvements in government revenue.  There is no state in Nigeria with less than 10 untapped different   mineral resources. Regards to diversification of the economy there is need for Federal government to develop the country untapped mineral.   Despite this huge opportunity still   domestic mining industry is underdeveloped, leading to Nigeria having to import minerals that it could produce domestically.

According to 2018 report of geology and mineral resources of Nigeria  estimated Nigeria’s iron ore deposit to reach three billion tonnes, coal, three billion tonnes while lead and zinc are to reach 10 million tonnes each. If  Federal Government can make a lot of money from mining if well exploited and  invest into   coal, gold, tantalite, and cassiterite to shore up revenue. Just from  iron ore experts says Federal Government can make $280 billion from iron ore annually more than what the country earn from crude oil. The country will set itself free unless federal government  develop the country untapped mineral  industry, modernise the agricultural sector and  develop the tourism industry

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