We need to step up our quest to become less dependent on oil revenue…the government must not pay lip service to developing the non-oil sector for the country’s economic development
The 2015 budget, still before the National Assembly, has elicited varied reactions from different quarters since it was presented by Dr (Mrs) Ngozi Okonjo –Iweala, the Minister of Finance and Co-ordinating Minister for the Economy. Notwithstanding the different views, the desire of the government to derive the bulk of revenue for the budget from non-oil proceeds is however a welcome development. Indeed, we are glad that the Minister admitted the necessity to move away from over reliance on revenue from the oil sector to a diversified economy.
Over the years, the government has been highly reliant on earnings from crude oil exports for domestic spending. But the recent reduction in demand from its two major buyers and falling price of oil in the international market have led to a reduction in government revenue. Therefore to address this problem, we need to step up our quest to become less dependent on oil revenue.
Undeniably, the non-oil sector has always been regarded as a viable alternative for driving the Nigerian economy. The agricultural sector for instance is seen as the biggest employer of labour in the country, yet government has not been able to provide the needed environment for the sector to take us back to the days of glory. A walk down memory lane would reveal how buoyant our international trade in agriculture was with the groundnut pyramids in Kano and the oil palm produce in the then Eastern Nigeria. Today it is a shame that Malaysia, which took the palm oil seed from Nigeria, has surpassed the country in the production of the commodity. While it is true that no sector can single handedly match the potentials in the oil sector, we believe that a combination of major non –oil sectors can equally provide significant benefits to the country’s economy. That is why we feel that the government must not pay lip service to developing the non-oil sector for the country’s economic development.
In this regard, government equally needs to encourage the manufacturing sector by reducing the interest rates for small and medium scale enterprises. In fact, experts have attributed the shut down of most manufacturing companies to the rising cost of operation, thus increasing unemployment rate and reducing opportunity for the government to earn more revenue through taxation.
It is instructive that while the government is focusing on taxation as key to generating more revenue from the non-oil sector, the thinking is that this would not be enough to sustain an economy with high interest rate and high recurrent expenditure. Therefore government needs to also cut down on frivolous expenditure as a way of earning more revenue for the country.
No doubt, with the continuous slide in the price of crude oil in the international market, this is the time to intensify plans to develop Nigeria’s non oil sector considering the human and natural resources available in the country.
