During his Independence Day address to the nation, Nigeria’s president, General Muhammadu Buhari reiterated his administration’s commitment to completely diversify the economy and strengthen other sectors to boost the country’s GDP. President Buhari reaffirmed that the country is steadily progressing and creating more opportunities in other sectors to reduce government reliance on oil revenue.
Over the years, Nigeria has depended on oil revenue to fund its budget and build a robust economy. However, dwindling oil prices and poor administration of funds has drastically affected proceeds from oil exports.
“We are diversifying away from reliance on oil to increased manufacturing capacity, solid minerals development, and agriculture,” Muhammadu Buhari stated during his speech.
On October 1, 1960, Nigeria gained independence from Britain and became a federal republic three years later. The year 1960 was remarkable in the history of Africa as it represented an evolution for all countries with a similar vision. As it has been for many of these nations, Africa’s most populous nation continues to address the plethora of problems it is faced with five decades later.
During the early years of post-independence, the country was raking millions from the exportation of cocoa and other farm proceeds. But, in the long run, Nigeria became a major producer of oil and assumed a prominent role among oil-producing countries across the globe.
“We are gradually strengthening the economy with a stable Naira and falling inflation rate. We are building an economy that is moving away from over-reliance on oil. Consequently, we have witnessed a massive return to farms and seen bumper harvest, despite recurrent floods across the country,” he continued.
Recently, Nigeria’s GDP dwindled and further triggered a more intense discussion about diversification of the economy. According to the official data released by NBS, the growth in Q2 2018 was –0.45 percent points lower than 1.95 percent recorded in the first quarter of 2018. The national statistical agency further stated that growth in Q2 2018 was driven by developments in the non-oil sector as the services sector recorded its strongest positive growth since 2016.
Currently, Nigeria’s external reserve is shrinking as investors continue to repatriate funds out of the country owing to political uncertainty. Thus the external reserve its downward trend for the tenth consecutive week last week, with a month-to-date decline of $948 million, raising fears over the ease of doing business and prospects of the economy.
Nigeria is on the heels of another historic presidential election which will come up in February 2019, and financial experts have argued that the country must find a way out of its current financial quagmire to avoid another recession. Others have also argued that Independence Day celebrations will only be worth it once practical measures are put in place to solve the country’s economic problems.