DEVELOPMENT: Nigeria Moving Away from Oil Economy

By Toye Olori Reprint | | Print |

Toye Olori

LAGOS, Oct 23 2002 (IPS) - Nigeria, which depends on oil, plans to develop the country’s non-oil sector in the next five years.

Up to 90 percent of Nigeria’s foreign currency revenue is derived from oil.

Nigeria’s non-oil sector has been neglected for a long time. Now, the government is seeking to boost its Gross Domestic Product (GDP) to four percent by next year and to more than seven percent by 2007.

‘’Government will support increased investment in infrastructure and human capital, with particular attention to rural development,” said President Olusegun Obasanjo.

He made the remarks at the ninth Nigerian Economic Summit (NES) held in the administrative capital of Abuja late last week.

During the summit, Obasanjo unveiled ‘The Framework for Nigeria’s Economic Growth and Development’, a key document containing the country’s new economic blueprint.

The document unveils a five-year (2003-2007) plan of action: covering agriculture, manufacturing, tourism and mineral development.

‘’Nigeria is blessed with very large deposits of minerals including coal, marble, tin, kaolin, gypsum, talc, feldspar, quartz, gold, bitumen. So far, a very large proportion of these deposits is being exploited illegally, with negative effects on the environment. The inefficiency in this type of mining has resulted in substantial loss of revenue to government and job opportunity,” said the document.

Nigeria’s population – which is about 120 million – has been growing at about 2.8 percent per year, and the government says it will target a growth rate of at least three percent a year in the private sector. As of June, Nigeria’s unemployment rate stood at 13.6 percent.

Revenue from crude oil went down drastically mid this year due to a cut in the production quota by the Organisation of Petroleum Exporting Countries (OPEC). Current production is estimated at 1.787 million barrels up from two million barrels per day early this year.

‘’The boom-bust economic cycle experienced over the past several years is directly related to over-reliance on crude oil exports,” the document said.

But the Nigeria Labour Congress (NLC) has warned that it would fight any attempt to lay off workers.

‘’The government does not have its own mind but depends on the International Monetary Fund (IMF) for statistics. We have a very lazy elite that has no vision and does not take initiative and does not increase national wealth and is incapable of developing our economy. All they do when the economy is in trouble is to remove the workers’ benefits,” says Owei Lakenfa, NLC Assistant Secretary General.

‘’The issue of a bloated civil service is a wild economic hypothesis that the government and economists push around. Pruning is not based on any economic reality or fact but on the feelings of the moment. The IMF and the World Bank feel we need less governance and this has been touted not just by the government but also by our economists,” he says.

The labour leader says the claim by government and economists that the civil service spends 70 percent of national economy is false.

‘’Those in power and their hangers-on spend this money. We all know that this year’s budget has not been implemented, we all know that the influential people in the private sector do not pay tax, we know that this country depends on oil and tax from workers. All that those in power do is share the national wealth among themselves but blame the civil service for their economic woes,” Lakenfa says.

‘’We want the economy to grow by 10 percent a year,” says Adebajo Adetilewa, a member of the Presidential Economic Advisory Committee.

The government hopes to reduce Nigeria’s inflation rate – which is currently 12.3 percent – to below 10 percent by the end of 2007, and assure foreign reserve levels to at least six months of import as well as crude oil production base of two million barrels per day.