Budget 2016: Experts Okay Focus On Non-Oil Revenue


Despite measures by the Federal government to protect the economy from downbeat effects of dwindling crude oil prices and ensure desired balance from the expected diversification of the economy, efforts are still far-fetched in Nigeria’s drive to boost its revenue base and foreign exchange earnings. Chinyere Obiora looks at the likely impact of depending on Agriculture and Minieral resources to grow the nation’s economy

It is a globally known fact that the speed of development in any country depends largely on its resource mobilization especially, finance. Experts postulate that for a country to attain the desired growth and development, the economy must be diversified in a way that ensures real-time development of various sectors. In the last 20 years, Nigeria’s problem as an oil exporting country, according to an allusion, in even government circles, has been about how to spend revenue accruing to the country rather than how to generate it. No doubt, oil discovery contributed substantially to export revenues in Nigeria, especially when prices were on the upward trend. Regrettably, the huge foreign exchange earnings from crude oil sales encouraged importation of finished foods to the detriment locally manufactured ones, with the agricultural sector rendered less competitive over time through over-valued currency; inappropriate pricing policies; and scarcity of farm labour due mainly to youth migration from the communities to urban areas in search of wage employment. However, recent dwindling prices of crude oil has exposed Nigeria’s vulnerability to external economic shocks and given our over-dependence on its export, there are fears that Nigeria’s growth rate could suffer serious setback if the prices of crude oil continues the free fall. This situation demands adoption of urgent strategies and policies by government for the diversification of its revenue base. With mounting pressure from proponents of this school of thought on government to walk its change mantra talk, financial operators said exploiting and developing the agriculture, solid minerals and tourism sectors to fund the 2016 budget is a must. They also believe that declaring a state of emergency in agriculture would make this tall dream come to fruition. This is because in the past, production and exportation of cocoa, groundnut, rubber, palm kernels and palm oil accounted for 96.4 per cent of total exports earnings, while non-oil export products accounted for 97.3 per cent of total export. Again, some experts said the challenges of today were caused by past leaders who concentrated in oil money and abandon the agriculture and mining sectors. Aligning his thoughts with the proposed funding of the 2016 budget from non-oil revenue, former President, Chartered Institute of Bankers of Nigeria (CIBN), Mazi Okechukwu Unegbu, said the federal government’s plan to develop agriculture and mineral resources to fund the 2016 budget might not be feasible as certain conditions must be applied in the system to make such arrangement viable. He said implementing the proposed budget for positive impact on the economy would be difficult because the fundamentals and assumption on which projections are based appeared unrealistic in our present environment. According to him, “for us to effectively develop agriculture as a major revenue earner for this country, it is imperative to map out areas for effective agricultural production and related activities. It is not in all part of Nigeria that agriculture is viable. I think government should carve out areas and then support those areas with farm machinery, extension of farm products and agricultural officers.” He however said there was need to provide social amenities in such mapped out areas for the development of agricultural and mineral resources. Canvassing his position further, the former CIBN chief said provision of electricity, water, good roads and other infrastructure facilities in the rural areas would encourage young graduates to easily accept relocating and living in rural areas and still practice farming in a modern scope. He added that no matter the amount of funds invested in the agriculture sector without providing basic social amenities in the designated areas, it would be difficult for young graduates to reside in remote environment and productively engage in farming. Unegbu maintained that in the past, under-graduate students, who belong to young farmers club, had parcels of land in their respective schools to undertake farming, stressing that crops harvested from such farmlands enable some students raise money to pay their school fees. On what can grow an economy, Unegbu said one must acquire necessary skill, apply the skill to work, earn a salary out of it, spend it in the economy to ensure that the production circle continue, adding that this would in return create both low-class and high-class employment within the economy. To him, “as long as our leaders only believe in collecting money and sharing same without any qualms, there would be no room for the production of local goods, a development that would continue to affect the entire economy and ensure it remains a loser and stagnant. He also said; “for the current administration to use agriculture and mineral resources to fund the budget, we must restructure the six geo-political zones in the country and allow each one to revive the agricultural products and mineral resources produce from their various zones.” He said initially the West gave a good account of itself in cocoa production while the North and East were known for producing groundnut and palm oil, stressing that restructuring and giving the zones opportunity to operate and compete among themselves would make the economy grow faster than expected. “The diversification of the economy must start immediately and no longer just being touted. We should not put much money again into the oil sector. Even the electricity sector must be diversified because we have a huge deposit of coal in this country,’ he said. Corroborating Unegbu’s position, Managing Director, H.J. Trust and Investment, Mr. Harrison Owoh said before the oil boom, each region had mineral resources it extracted to develop its region. In his view, Nigeria has depended on oil for so long with past governments paying lip service to the issue of diversifying the economy, noting that the dependence on oil was due to the easy money the country was making from the sector. Owoh said the only way to achieve great result in developing the agriculture and mineral resources is for government to start from the basic fundamentals. “If the government will start today to develop agriculture and mineral resources, it means the country will record the much-desired development in the economy within the shortest possible time”, he enthused, adding that though it would take time to develop the non-oil sector for improved foreign exchange earnings, “we need to start now to save the nation’s economy from collapsing.” Specifically, Owoh insist government should give a time-frame to ban all the imported products that can be produced in Nigeria, stressing that, “though life might not be easy for many Nigerians if government should take such measures, we need to stop importation of goods produced locally for the survival of the economy.” Furthermore, it is his contention that government should provide social amenities in local communities as incentives for people to settle in such environment and embark on farming or work in companies located within the rural areas as a way of creating massive employment and decongesting the urban areas. Another voice in the direction of exploiting our agriculture and mineral resources potentials to fund 2016 budget is that of a financial analyst, Mr. Kayode Adewale, who described it as the most viable alternative for the country in the circumstance. Adewale said such decision would help to create employment for the people, adding that declaring an emergency in the agriculture sector is long overdue, against the backdrop that each region had in the past engendered socio-economic development based on its available resources. Citing the late Chief Obafemi Awolowo example where the Western region recorded great developmental strides by depending largely on proceeds from cocoa, palm oil, rubber and coffee, the expert said “looking at the vast opportunities in agriculture across the country, we would gain a lot if there are more investments in agriculture.” He said Nigerians must not shy away from the calls for removal of oil subsidy, stressing that, “If the Federal Government can remove the subsidy and use it to fund agriculture, mining and tourism, this will go a long way to reduce the sufferings of the people, as there will be employment, food security and low food price.”

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