Cross section of panelists at the Diversification of Nigeria Economy discussion during the SPE Annual Conference
Owing to the sordid experience that Nigeria passed through during the fall of oil price, it went into recession and the economy collapsed, there is need to look beyond oil. The value of diversification to insulate the economy cannot be over emphasized.
The Managing Director of Shell Nigeria Exploration and Production Company (SNEPCo), Bayo Ojulari, spoke at a panel session for diversification of Nigeria economy during the Society of Petroleum Engineers (SPE) annual conference, that the country is a mono-economy state making it vulnerable. He said Nigeria went through “Recession when its economy went down because it depended on one component.” The country should focus on employment since about two million people join the Nigerian labour market every year which is worrisome.
Therefore, diversification of the economy cannot be overemphasized. Nigeria is well blessed with good land mass suitable for agriculture including mineral resources and other elements. Nigeria has a large population and the biggest economy around the world are leveraging on population. He said the insulation of America and China economies is due to population hence people should be orientated towards production. Population is a blessing to a country which is advantageous to Nigeria, the middle class and growing young generation should be carried along in the chain of progress.
Ojulari gave examples of diversifications that can be a cue to Nigeria moving forward. He said Texas was known for technology, manufacturing and health. These were the three aspects that Texas focused on when it moved away from oil. It made a huge difference for the American state. The United Arab Emirate (UAE) was also one those countries who embarked on diversification. UAE focused on media, telecom, tourism, manufacturing and commercial aviation. Today, Emirates Airline is making waves around the world. The country made strategic choices and diversifies its resources. Qatar went into real estate, financial services, knowledge based and tourism.
For Ojulari, diversification should be consciously done with choices because two things cannot be spread at the same time, the impact will not be felt.
Although diversification is a good option for a country, but there are concerns and challenges. Lack of infrastructures across Nigeria and the major issue is power. The country lacks power to drive its economy and diversify. For instance, many manufacturing companies in Nigeria relocated to Ghana since there is no adequate power supply in the country. But Ghana has stable power. Power is critical for diversification. The micro economy uncertainties make it difficult for investors to invest, this is a major concern.
He mentioned that digital transformation plays a vital role in diversification. Ten years ago more than forty percent of the recent skills around the globe were not acquired. Going forward, human capacity is key in a diversified economy. Collaboration with tertiary institutions should be enhanced for greater success than what it is. Public, Private Sector partnership is necessary for diversification which could thrive through corporate citizenry. Corporate citizens are accountable and supportive to governance by playing vital role to strengthening the economy.
Ojulari noted “If we all deliver and align with the 7 BIG wins, this country will move forward.” On the three government main priorities, security, economy and corruption, these initiatives will enhance the country towards diversification.
He advised Nigerians to support the government to fight corruption in order to drive accountability and transparency. The corporate citizens should also aligned with government to achieve its mandate adding the country needs an environment and society where corruption and impunity are not tolerated for it to progress by attaining its objectives.
According to the SNEPCo boss, since Nigeria is a big country, it needs diversification road map “to see the world from the eye of diversification.” There should be commitment to actualize the goals of diversification and without strategy the purpose will not be achieved. Ojulari posited that there should be collaboration between government and private sector is such that both parties will not be working at cross purposes including the academia with agreement on diversification road map, the objectives will be attained. It will give room to evaluate performance, joint commitment and accountability. Lack of evaluation has led to under-performance in the country hence a diversification road map with jointly signed commitment by all stakeholders is the best option. It will show what every stakeholder has contributed and also leverage their performances.