A former Governor of Anambra State, Peter Obi, said in Lagos on Thursday that Nigeria plunged into economic recession because of her inability to save during the boom period. He, however, stressed that aggressive savings, diversification of the economy towards manufacturing, export of value added and knowledge-based products were key to addressing Nigeria’s economic quagmire.
Obi made the remarks in a paper titled: “Sustaining Growth through Diversification of the Economy,’’ at the 1st Annual Conference of the Guild of Corporate Online Publishers.
“Aggressive savings will help the country to achieve micro economic stability by ensuring a suitable interest rate.
“Moderate inflation and strong capital inflows from foreign investors (portfolio and direct investments) that will in turn help the government to raise the capital to start rebuilding deteriorated infrastructure.
“Since the beginning of the 21st century, the Nigerian economy has been on growth trajectory, growing on average above five per cent, until recently.
“This economic growth for over a decade led Nigeria to become Africa’s biggest economy with a GDP of more than $500 billion.
“In August 2016, following two consecutive quarters of negative growth, Nigeria went into economic recession and now has been through six quarters of negative growth.”
According to him, the question to ask is how will Nigeria come out of recession and bounce back to sustainable growth?
Obi, however, said the answers were two-fold, which include aggressive savings to build the external reserves.
He added that others were the diversification of the economy away from dependence on oil, for the nation’s export earnings to manufacturing and other value added services and evolving a qualitative and development-oriented education system.
He said that “Oftentimes, we say that the solution to our economic problem is to diversify our economy. But our local economy is fairly diversified.
“Our current GDP figures, for example, show that non-oil is contributing over 80 per cent of the GDP. However, the tragedy of our situation is that 90 per cent of our export revenue comes from oil.
“For example, the last published 2015 data shows that of the total export revenue of $45.5 billion, oil exports accounted for $42 billion, leaving the non-oil sector, which has the biggest GDP contributor to account for only about $3 billion.
“With virtually one source of export revenue and very poor savings, one does not need to be an Economist to know why the Nigerian economy is volatile and weak.”
He said the critical challenge for achieving sustainable economic growth in the country was for the nation to make agriculture, manufacturing and other sectors contribute more to export revenue.
According to Obi, this can be achieved by revolutionising the manufacturing sector whose contribution is still below 10 per cent of the GDP.
He said: “In 1980, the Nigerian industrial capacity utilisation was 70 per cent, contributing over 15 per cent of the GDP, but has since gone prostrate, producing merely 9 per cent of the GDP.
“To further elucidate on the need for aggressive savings and kick starting of an industrial revolution, it is important to compare Nigeria’s economic data with that of six other countries with similar trajectory, (i.e. military intervention, corruption, militancy, terrorism): Indonesia, Turkey, South Korea, Thailand, Malaysia, and China.”
He said that research findings indicated that countries compared above and their achievements were as a result of aggressive savings and diversification of their economies towards manufacturing and value added.
Femi Adesina, Special Adviser to President Muhammadu Buhari on Media and Publicity, warned online publishers to avoid hate speeches, blackmail and propaganda.
Adesina added that such had become a national malaise, aggravating the tenuous unity of the country.
The president’s spokesman also frowned at the trending photograph of the ailing elder statesman, Senator Arthur Nzeribe, on the social media.
Adesina, however, urged the online media to always try and be objective in carrying out their activities.