Nigerian Economy Is Import Dependent, Consumption Driven – Amaechi

The Minister of Transportation, Rotimi Amaechi has lamented the over dependent of the nation’s economy on oil and gas.

Amaechi, who spoke at a virtual Economic Summit 2020 organised by WorldStage, said the Nigerian Economy remains highly import dependent, consumption driven and undiversified.

According to him, the oil and gas sector continues to play a significant role in the economy and accounts for 65% of total revenue of the government and 88% of the country’s export and foreign exchange earnings while the manufacturing sector accounts for less than 1% of total exports.

He stressed the need for a diversified economy with diverse revenue streams that provides the country with the security and reliability they need, adding that if one economic revenue stream fails, the nation relies on the several other options for revenue generation.

“Economic diversification could be explained from the perspective of sustainable development to ensure long-term stability of the economy.

“Through this means, it has the capacity to fundamentally strengthen the adaptive capacity of an economy and safeguard its long-term prospects, in the face of depletion of the basic natural resources and the vagaries of economic fluctuations under the pressure of competition from globalization.

“The structure of the Nigerian Economy remains highly import-dependent, consumption-driven and undiversified. The oil and gas sector continues to play a significant role in the economy and accounts for 65% of total revenue to the government and 88% of the country’s export and foreign exchange earnings while the manufacturing sector accounts for less than 1% of total exports.

“This has made the economy susceptible to uncertainty in the global oil price which is exogenously determined and explains the ceaseless fiscal shock in the Country whenever there is a dip in the prices of crude oil and gas.

“This has also contributed to alarming poverty and unemployment rates in the Country despite Nigeria’s inherent potential to become a major player in the global economy by virtue of its human and natural resource endowments,” he said.

The minister stated that President Buhari has adopted economic diversification as one of the broad strategic objectives of Economic Recovery and Growth Plan (ERGP).

This, according to him, entails government’s focus on non-oil sectors as Agriculture, Transportation, Industrialization, Science, Technology, and Innovation (STI), among others.

In this regard, the government has made massive investment in agriculture geared towards ensuring food security and job creation.

“Some of the key outcomes of this initiative are the national self-sufficiency in rice and wheat. Government is making concerted efforts to provide conducive and competitive business environment that will help in revitalizing the industrial sector especially Small and Medium Enterprises (SMEs). This is expected to enhance job creation and stimulate foreign exchange earnings.

“One of the critical areas that is central to actualizing economic diversification in Nigeria is massive investment in transportation infrastructure. Transportation is crosscutting and permeates many economic sectors, facilitates international trades, supports food security, delivers energy and enables industrial and infrastructural development. It generates employment and helps create prosperity, thereby fulfilling critical economic as well as social functions.

“In the computation of the global competitiveness index, the World Economic Forum (WEF) admits that transportation infrastructure are not only key pillars but also basic requirements upon which other pillars must stand. Adequate transportation infrastructure could trigger a country’s economic progress by diversifying production, trade and export. It is important to note that transportation Infrastructure ranking usually have low economic diversification index,” he explained.

He added that, “Nigerian Government is making tremendous progress in changing the trajectory of the transportation sector in Nigeria from unproductive to a productive and competitive one. The Government has embarked on implementation of multi-modal transport system and revitalization program as well as huge transport infrastructure investment across the Country.

“These interventions by the Federal Ministry of Transportation include massive construction of roads, rail lines with access roads, inland water ports, seaports, new terminals in existing ports, dry ports with access to rail and roads, Inland Container Depots/Freights all geared towards building a modern and efficient transportation system that guarantees sustainable socio-economic development of Nigeria. Also of relevance is the development of adequate manpower to ensure efficiency in the Transportation Sector.

“It is perhaps noteworthy to state that in the Rail Subsector, the rehabilitation of the Narrow Gauge line and construction of the Standard Gauge lines along, Abuja- Kaduna, Lagos-Ibadan, Warri-Itakpe recently commissioned are efforts made to provide revenue for the Government and provide employment opportunities to the teeming Nigerian Youths. In addition, Government has been making giant strides in the development of National Freight Offices in line with ECOWAS Protocol at the nation’s border towns to regulate borders and International Road Corridors. Efforts are also being made to put in place proper regulations in the road subsector to provide an enabling and competitive environment for Road Transport Operators.