Economic expert, Dr Ayodele Shittu, Department of Economics, University of Lagos, have called on Nigerian Government to prioritize domestic resource mobilization to consolidate the gains of economic diversification in the country.
Speaking at the recent World Stage Economic Virtual Summit, he commended the role of the Economic Recovery and Growth Plan (ERGP: 2017 – 2020) in Nigeria’s quest for a diversified national economy. He recommended that Nigeria should rethink its investments in infrastructure and technological progress. “From the perspective of a developing country, infrastructure should include both physical and human. By implication, it is expedient to investment more in public education and health in the same manner that we are investing heavily in the construction of roads and rail across the country.”
According to him, it is also important that we control our development space. “One notable advantage of the resource mobilization perspective is the fact that it encourages inward solutions to revenue demands. This limits the extent to which a sovereign nation such as Nigeria depends on other sovereign nations. By implication, when Nigeria owns its development space, it will give room to home-grown solutions that matches and fits with emerging challenges that are peculiar to Nigerians.”
He added that “drawing from the resource mobilization perspective, reduced dependence on foreign capital inflows means reduced debt burden or reduced commitments to internationally written contracts, which in most cases deplete our national savings. By implication, a control of our policy space implies conscious development of our investment destinations, creating of home-grown industries that are value-chain driven, and finally, there will be more job creation opportunities for Nigeria’s teeming youth populace.”
He spoke on the need to promote resilient and productive investments in the country. “In order to consolidate Nigeria’s economic diversification drive, it is important to reconsider the nation’s investment drive. My choice of starting with investment is borne out of the desire to correct lingering misconception that economic diversification is the same as investments in infrastructure. I must commend the effort of the Federal Government of Nigeria for the resilience and vigour committed to the construction of roads and rails across the country. However, is this all that defines infrastructure? In a lay man’s language, any service or system that facilitates smooth and efficient operation is an infrastructure. Thus, the first step towards consolidating Nigeria’s economic diversification is to promote resilient and productive investments in infrastructure (i.e physical and intellectual) and in technological progress. There are three important gains associated with resilient and productive investments namely improved private sector participation, scale up and growth prospects for small business, and effective diversification of the economic base of the country.”
He also called on government to shift away from over-dependence on natural assets. “Over the years, attempts to depend less on natural assets inherent within the Nigerian economy have remained futile. This can be traced to ease with which revenue is generated from the export of natural resource – mainly crude-oil and solid minerals. The revenue, which has over the years become a lucrative source of foreign earnings, is also fast becoming a source of economic pain for the country. While Nigeria’s economy is the biggest in Africa by GDP, we are simply a small country at the global market because our country cannot influence not determine the selling prices of the natural assets that we ship abroad. Besides, persistent export of natural assets exposes our economy to external shocks just as we experienced in the mid-2014 and the first quarter of the Y2020. In order for us to consolidate economic diversification in our country, now is the time for depend less on the export of our natural assets. Instead, we need to commit to the identification and development of value-chains inherent in these assets. If this can be achieved, the implications on manufacturing, employment, and poverty reduction are enormous.”
On ownership of Nigeria’s development agenda, he explained that “The ERGP, which is designed to last for four years, has made a significant impact by taking Nigeria back unto the growth path. However, there are other development agenda that requires the support of the Nigerian government. It is important to note that Nigeria is neither an island nor can it survive in isolation. These Sustainable Development Goals (SDG) and Africa’s Agenda 2063 are two global development agenda that needs to be domesticated in our country. For Nigerians to own their development agenda, citizens’ participation must be encouraged in the planning, design, implementation, monitoring, and assessment processes. A bottom-up approach is usually preferred and public goods that emanate from such development strides will be properly managed at the community levels. Above all, when Nigerian owns the development process, it stimulates the intellectual assets of the country.”
“A commitment to resilient and productive investment in infrastructure and technological progress; to depend less on exports of natural assets, and to take ownership of development agenda in the country is a commitment to deepening economic diversification and promoting economic independence of the Nigerian state. Another benefit of promoting domestic mobilization of resources is enhanced fiscal consolidation. This will not only foster strong fiscal capabilities among the state and local government across the country, it will also entrench improved revenue and public spending management in Nigeria. Consequently, accountability, transparency, and equity will form the basis of executing economic activities in the country” he said.
On COVID-19 Pandemic and Consolidation of Economic Diversification in Nigeria he suggested that “There is an urgent need for us to reduce our dependence on external sources of financing. This does not connote abandoning external sources of financing 100 pct. rather, it implies that it is high time Nigeria government began to look inward, develop home-grown industries, and create noble and decent job opportunities for all.”
“There is an urgent need to secure our policy space. The ERGP is a testimony of what Nigerians are capable of doing. The more we appreciate our won intellectual assets, the better us because innovation and technological know-how will be home-grown. This paves way for less importation of technology and consequently, local innovation ecosystem will be developed across the nation.”
“There is an urgent need to control our development agenda. The shock that came with the COVID-19 pandemic was so rude that it exposed the deficiencies that have characterized the nation’s health and educational system. If we own on development agenda, research and development will be driven by local needs and our innovations will be tailored towards solving problems that are peculiar to Nigerians.”