The incoming government needs to focus on developing manufacturing, trade and tourism sectors. For this is the path Nigeria must follow to save the economy from relapse
The recent media report that the United States (US) government has halted oil imports from Nigeria once more brings into focus the need for the federal government to aggressively diversify the economy.
In the last one year, the volume of Nigeria’s crude oil exports to US refineries had witnessed drastic reduction and on-and-off supplies as exploration of shale oil in the US yield more fruits. But it is unfortunate that the federal government recently officially confirmed that the US has completely stopped importing crude from Nigeria. In fact, this is the first time that Nigeria will not export its crude oil to the US refiners since 1973.
There is no doubt that this development will definitely create a troubling scenario for the Nigerian economy considering the fact that over time, it has depended on oil exports for its foreign earnings. As at 2010, Nigeria had provided about 10% of overall US oil imports and was the fifth-largest source for oil imports in the US. However, from July 2014, the impact of the shale production in America had necessitated the discontinuance of crude oil exportation to the US.
What is more, as the US oil import halt does not just affect only Nigeria but other major African oil producers and the Middle East, the oil market disruption will cause a huge influx of oil producers in the Asian market thereby forcing them to sell at a discounted rate to attract customers which will not bode well for the economy.. It is even more worrisome that the shale revolution had made almost every country a potential oil producer. Therefore it would not be in the interest of the economy for Nigeria, under the circumstances, to rely on oil exports to the Asian and Europe markets.
This is why this development is therefore an eye opener and a wakeup call for government to begin to look inward. The country certainly is blessed with enormous natural resources that could be exploited for the benefits of the citizens, some of which are yet to be fully tapped by government.
Besides the government must begin to take advantage of the enormous natural gas resources, by investing more in development of its domestic use, and for export. But beyond this, the incoming government needs to focus on developing manufacturing, trade and tourism sectors. For this is the path Nigeria must follow to save the economy from relapse
