It is true that crude oil has contributed substantially to Nigeria’s economy, developing its financial outlook and partially improving the standard of living of its citizens. The nation has been highly dependent on the oil and gas sector of the economy, which has been its primary source of revenue, but it is now evident that the dwindling price of crude oil shows that our over-dependence on this one sector makes us more vulnerable to economic shock.
Apparently, the recovery of the other sectors of the economy from their long-sentenced ‘exile’ is the only solution to bringing us out of a seemingly inevitable economic doom. Obvious need for diversification and reawakening of other sectors cannot be over emphasised at this stage, judging by the present state of the economy.
Economic diversification is a necessary policy that every country should engage in to avoid financial shocks when there is distress in the one dominant sector of the economy, as is the case with Nigeria today. Our inability to derive earnings from other sectors such as the agricultural, manufacturing, mining, finance, to mention a few, has restricted us to a single, vulnerable source of income generation.
Nigeria’s economy was relatively stable before the coming of the ‘black gold’. The agricultural sector was generally known to be the dependable source of income for the country before the discovery of oil in 1956. But it seems like all of its wondrous characteristics were soon forgotten after the discovery of oil. The agricultural sector still holds the ace for our economic redemption, if properly harnessed. The current high rate of unemployment is practically as a result of fewer opportunities for human engagement, this is because well thought-out measures have not been taken by the government to revive the agricultural sector.
Nigeria’s penchant for depending largely on imported products, thereby leaving the industrial sector of the country dormant and unproductive, has also led to our current disastrous economic status. Basically, products made in the country are considered substandard because this sector has not been improved in years and has become ineffective. Even the oil produced in the country is taken outside to be refined, while our refineries remain moribund.
Economic diversification is basically the only panacea Nigeria needs to stem the depressing decline in the nation’s income. It goes beyond general announcements and recommendations, but requires practical resolutions. We can overcome our one track structure of national income generation by channeling our ideas, finances and facilities towards making judicious exploitation of our several other natural resources.
It has been often stated that Nigeria doesn’t have a problem with resources, because they are available in abundance. But our lack of the will and human capital to tap these resources and put them to productive use has led to a progressive decline in our national fortunes over the years.
What this country needs today in its bid to diversify her economy isn’t just a daily pronouncement of plans and intentions, but a set of concrete actions in that direction. We have all we need yet we cry in the midst of plenty. The decline in crude oil price would have less negative effects on our national finances if other sectors of the economy are optimised.