By Peter Osalor
Perhaps the most optimistic of recent signs have been observed in the non-oil sector, which doubled since 2001 and currently accounts for 7% of GDP.
Another success story is the revival of agriculture and its growth to 42% of GDP by 2008. Although oil continues to be the mainstay of the Nigerian economy, contributing 85% of all revenues, recent governments have wizened up to the idea that the country’s tall ambitions cannot be fulfilled without rapid economic diversification. The answer, given the country’s abundant human capital and natural resources, is rapid business development in the SME space. Nigeria has a great opportunity and an even greater obligation to foment an enterprise revolution that will radically transform its economic landscape.
The following are some of the broad parameters Abuja must be guided by while formulation economic policy interventions in this regard:
“Creating a central body with responsibility to coordinate all policies relating to start-ups and existing enterprises.
“Creating a mass base of viable enterprises across the non-oil economy by promoting private sector equity participation. “Reinforcing micro-finance institutions to enhance loan-disbursement capacity for small businesses.
“Cutting down on high operating costs with tax breaks and financial incentives directed at entrepreneurs.
“Removing institutional deterrents that lead most new and emerging enterprises to operate in the informal economy.
“Improving technical support for rural enterprises that continue to operate using outdated practices.
“Improving entrepreneurial productivity through tertiary skills development and vocational training programmes.
Given the vagaries of its economic history, Africa’s second largest economy faces tremendous hurdles in securing a better place for itself in global rankings. Abuja has not had a particularly impressive track record in terms of timely economic intervention, as the gathering banking crisis demonstrates.
What Nigeria needs today are aggressive, pro-active policies that have the full benefit of both its past experiences and its future aspirations. Despite the fact the efforts have been made in the past to expand the Nigerian Economy, it can only be said that it is only in the subsisting dispensation that significant progress and momentum are being realized with regards to this.
The non oil Sector must be made to drive the GDP growth over the next couple of years which is expected to be between 7.6% and 7.72%.
Today, the oil industry provides 55% of national foreign exchange earnings and 85% of total government revenues. It is now essential more than before that agriculture, services as well as wholesale and retail trade is forecast to be positive contributors to growth.
“Most often, the growth is driven by production outcomes in crude oil and the agricultural sectors, both of which have limited impact on value creation in the economy. The oil sector fortunes are driven by domestic output global commodity prices, while the agriculture sector performance is dependent largely on the conduciveness of the climatic conditions.
If this growth can be sustained for the probable future, the result will be an economy which has a better balance between the public and the private sector. Conversely, the country has itself on the determined target of becoming one of the 20 largest economies in the world before the decade runs out; this clearly presents an enormous challenge and opportunity considering the immense investments that need to be made in Infrastructure, the government has quite rightly adopted a strategy of private sector led Infrastructure development.
Now the valid themes to be expected is how Nigeria can sustain the current move towards a diversified economy a further boost non-oil GDP growth; with growth in the Telecoms should the country expect a similar burst of entrepreneurial activity in the electricity and Infrastructure Industry: with regards to Industry and manufacturing in the next few years in terms of economic diversification, what roles will they play. We must also explore other strategic sectors that will be made to impact towards the march to 2020.