Nigeria Must Not Rely On only Oil – VP Osinbajo

Vice President, Prof. Yemi Osibanjo has advocated that for the nation to move forward, the Federal and State Government must reduce dependence on sharing revenue made from oil sale.

Osibanjo spoke at the Economic Forum organized by the Nation Newspapers in Lagos, Southwest Nigeria on Thursday. “We must look beyond oil because it disturbs us from looking to other sector. In order to move the country forward, we must reduce the Federal Government and state dependence on sharing revenue made from oil sales. “The foundation for a strong economy demands that we have appropriate fiscal policies that will help the country that is arising from a very low rate of VAT and a low taxpayer’s base. We are focusing on increasing the country’s taxpayers base. We are committed to expanding the tax net,” he stated.

The Vice President also lamented that the price of oil had collapsed from $114 per barrel to under $40, saying that the issue therefore was that “we must move beyond oil which accounts for larger percentage of the country revenue. It is pathetic that a nation with over 170 million people benchmarked its budget on the price of oil.” He said the present administration is determined to address the economic problems by prioritising key sectors.

“The way forward requires that we move from land and crude oil to production of petroleum products. That is rather than extract and exporting, the country must take full advantage of the oil sector and entire value chain. This will also assist us in making full use of our natural gas resources domestically and abroad. And it will aid us to fully implement long term laws in the oil sector.

“It is for this reason that the Federal Government will be prioritizing the adopting and execution of the National oil and gas master plan this year. We will also move beyond neglect of other sectors. While we believed that the oil sector was the only source of revenue, other sectors suffered and these sectors have the potential to drive the economy, provide jobs and others.

Lagos State Governor, Mr. Akinwunmi Ambode, in his speech said that for Nigeria’s economy to improve, its leaders must have the courage to take difficult and tough decisions, saying that the nation’s economy was at a critical threshold and thus, would require its leaders to think outside the box and come up with creative innovations that will trigger economic growth nationwide. He lamented the fact that previous governments at the federal level failed to take advantage of the oil boom to grow other sectors of the economy, saying that the fall in price in the international oil market coupled with many years of corruption has made the economy vulnerable.

“It is very unfortunate that we wasted the golden opportunity to deploy the trillions of dollars earned from our oil exports to develop the critical sectors of the economy including power, agriculture, industries, solid minerals, transportation infrastructure among others. No doubt, if we had done the right thing as some other oil producing countries did, keeping in mind that crude oil is a finite resource, we would not be experiencing the devastating effect of oil price crash on the scale we are experiencing it now.

“We are now being forced to do, with pains, what we should have done with ease years ago. The task of charting a new direction for the economy is not going to be a tea party. Various policy options must be identified and assessed on the basis of our current situation and needs. Moving our economy forward requires thinking outside the box and doing things differently. We need creativity, innovation and the courage to take difficult and tough decisions.

“The leadership of the country at national and state levels must have the courage to take tough decisions and make sacrifices in the near term which will, in the long run, make our economy stronger and sustainable and, consequently result in prosperity across all regions of Nigeria,” he said.

Recommending strategies to improve the economy, Governor Ambode said that the nation must begin to explore and expand the opportunities that abound in inter-State relations and strengthen regional competitiveness by maximizing economies of scale, regional optimization of assets and endowments and mitigation of afflictions and natural disasters.

He listed other viable areas for inter-State collaboration to include transport infrastructure to facilitate market linkages, education, market development, human capacity building, security and intelligence sharing, saying that it was high time to move away from an oil driven economy. “Prior to the oil boom era, Agriculture was the mainstay of Nigeria’s economy and contributed about 65 per cent to the country’s GDP and represented close to 70 per cent of total exports. Through farming, Nigeria was able to feed its population while major cash crops were exported to earn foreign exchange.

“From the cocoa and rubber plantations in the West, the groundnut pyramids and cotton in the north, to palm oil in the east; each region was identified by its economic areas of comparative advantage which were collectively harnessed towards ensuring food security and inclusive growth across the country.

“Given our current economic challenge, I believe it is time we take a cue from our old ‘playbook’ for a viable ‘game plan’ to revive our national economy. States and regions must once again begin to leverage on their respective areas of comparative advantage by establishing partnerships towards establishing inter-State or inter-regional commodity value chain. We must re-start inter-state/regional cooperation,” he said.