Covid 19: Time to diversify Nigeria’s Economy

Following the collapse of crude oil prices from 2014 to date
, which triggered unpleasant memories to
Nigerian government which found
itself in unchartered waters. Since than It continues to struggle to revive the
economy amidst dwindling oil revenues compounded by unemployment, poverty and
insecurity and due to over defendants on one major government revenue the
country remains weak and fragile -being
outstripped by population growth.

Who to blame for this mess up: Provocative policy of the Nigerian
government is the dependence on oil resources as a source of foreign exchange
earnings to the detriment of agriculture despite the country is blessed with
untapped mineral resources. With outbreak of the coronavirus, which has puts
global economics in uncertainty again, Nigeria’s economy is being caught in the
cross-hairs.

Nigeria the so called
Africa’s largest economy cannot currently fund its budget due to Covid
19 because budget passed with a benchmark oil price of $57 per barrel—nearly
double its current price of around $28,
knowing fully government relies heavily on petrodollars. It is now unarguably,
the collapse of oil prices not only pose a strategic danger to the global
economy but it has been danger to Nigeria’s economy development and also a catalyst behind nation domestic predicaments.

Absolutely there is lack of foresight from our leaders for
not save as much as possible especially
when the crude oil price reached its peak but Nigeria Forex reserve is
$37billion and can finance 4months of imports max and Nigeria technically has
$2,2billion.

Even before Covid 19
pandemic Saudi threw OPEC members under the bus because Russia refuses to cut
production to prop price up. Saudi flooded the market and offered discount to
buyers. Russia refused production costs because it thinks; cuts empower Shale
producers in America. Now Nigeria have about 50cargoes of oil floating on
international waters without buyers. A cargo contains about 2 million barrels
of oil.

Now Nigeria is facing severe
challenges. Oil price volatility is accentuated by rising commodity
prices, possibly the devaluation of the
naira against the U.S. dollar. Time for economy diversification

Notwithstanding federal government trying to diversify
the country economy but non-oil sector growth has not translated to
improvements in government revenue.
There is no state in Nigeria with less than 10 untapped different   mineral resources. Regards to
diversification of the economy there is need for Federal government to develop
the country untapped mineral.   Despite
this huge opportunity still   domestic
mining industry is underdeveloped, leading to Nigeria having to import minerals
that it could produce domestically.

According to 2018 report of geology and mineral resources of
Nigeria estimated Nigeria’s iron ore
deposit to reach three billion tonnes, coal, three billion tonnes while lead
and zinc are to reach 10 million tonnes each. If Federal Government can make a lot of money
from mining if well exploited and invest
into coal, gold, tantalite, and
cassiterite to shore up revenue. Just from
iron ore experts says Federal Government can make $280 billion from iron
ore annually more than what the country earn from crude oil. The country will
set itself free unless federal government
develop the country untapped mineral
industry, modernise the agricultural sector and develop the tourism industry.

Wrote in from Kano