FG’s Zero Oil Plan: Real Antidote For ‘Dutch Disease’

<strong>FG’s Zero Oil Plan: Real Antidote For ‘Dutch Disease’</strong>

In the 1970s, Nigeria’s non-oil sector, mainly agriculture, was the mainstay of the economy, accounting for more than 42% of commodity export earnings and about 74% of total government revenue.

Following the end of that period the petroleum sector took over dominance of the economy, accounting for over 90% of export earnings and more than 80% of government revenue as the catch of Dutch Disease which in economic parlance connotes increase in the development of a specific sector and a decline in other areas.

 No doubt Nigeria benefited from the oil boom period as it fuelled growth in various facets and placed the country on a robust human development index.

 However, just like it is often said there are two sides to a coin and the other side of the nation’s oil wealth since its discovery in commercial quantity in Oloibiri, present day Bayelsa State on Sunday, January 15, 1956 by Shell Darcy, the story has been bittersweet which set the tone for a departure from the country’s mono economy.

It would be recalled that diversification is not new in the nation’s developmental lexicon. Diversification of the economy away from oil and enhancing productivity growth in a stable macroeconomic environment were at the centre of the country’s Structural Adjustment Programme, SAP, adopted in 1986 as well as other successive governments in Nigeria.

Over dependence on oil had created an economic malaise that led to low output growth, high unemployment rate and rising inflation.

In recent years the economy has continued to perform below its potential. The economy remains extremely vulnerable to external shocks, particularly the vicissitudes of the world oil market prices.

 In this vein, experts blamed the poor economic performance on the country’s continued excessive reliance on the fortunes of the oil market and the failed attempts to achieve any meaningful economic diversification, reflecting the effect of over dependence on oil revenues as a result of abysmal management both by the leadership of the government and that of the National oil company management.

Therefore, there is the need to put the economy on the path to sustainable growth with a view to diversifying the economy and develop the non-oil sector with a view to realising the potentials of the economy as well as largely curtail borrowings.

Interestingly, the Federal Government through the Nigerian Export Promotion Council, NEPC, has certified 101 SMEs To Export Non-Oil Products to generate about $150bn in the next 10 years as part of opportunities provided by the African Continental Free Trade Area Agreement, AfCFTA.

Worthy of note is the establishment of export trade houses under a public private partnership arrangement to further enhance the visibility of Made-In-Nigeria products, facilitate market access and increase share.

 We hold the view that the successful implementation of FG’s Zero Oil Plan and other related ones will invariably enhance productivity, increase the share of manufacturing in total export earnings and drastically reduce the vulnerability of those economies to external shocks.

In addition, there is an urgent need to evolve policies to enhance productive growth in the non-oil sector in order to ensure that the country produces enough to satisfy domestic demand and more for exports to boost foreign exchange earnings as well as shore up the Federal Government’s revenue profile in a manner that will mitigate its appetite for borrowings and cure the most populous black nation of the Dutch Disease that followed the discovery of oil. To achieve this laudable plan of zero oil economy, security of life and property should be put in place as agro; mining and services businesses require adequate security of all and sundry.

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