…As FG urged to diversify export for more revenue

To contain the negative impacts of oil price crash on the
nation’s economy, the Federal Government has been urged to
diversify export to beef up its revenue base.
According to Mr. Opeyemi Agbaje, Senior Consultant/CEO of
RTC Advisory Services Limited, who gave this advice Thursday
in Lagos at the Annual Economic Review of Finance
Correspondents Association of Nigeria (FICAN),these should
form the fulcrum of the Federal Government’s responses to
the oil price crisis.
He explained that the government had done very well in
diversifying the domestic economies into various sectors, but
should also diversify exports and its revenue base with a view
to moving the nation’s major source of revenue from crude oil,
which constitutes about 95 per cent of its foreign earnings.
His words:“First, period of difficulties, as we all found in our
private lives, are not gloomy periods. They are periods of
opportunities, investments, hard work and in making the
necessary investment decisions. In terms of the structure of
domestic production, we have done a good job of
diversification, but the problem is that ,in terms of the
structure of export and government revenue, we have not done
enough. So, exports are still exclusively oil of about 90 per
cent and government’s revenue comes from that sale of oil.
So clearly, two things would happen, we would have to
diversify exports.And domestically, government would have to
diversify its income which means to increase focus on tax. We
have to diversify export; government has to diversify its
revenue by focusing on tax revenue. The issue of God and tax
will have to be the truth and the reality. Until oil price reaches
$100 again, everybody will have to focus on tax.
“From the point of business, there are still sectors that hold
promise for significant growth. Look at the e-commerce
space, look at Konga and Jumia and the growth that is going
on in that sector. Look at real estate, which is now eight per
cent of the economy. Look at entertainment, which is the
fastest growing sector in the Nigerian economy. Look at some
success in manufacturing around food, beverages and tobacco
and cement, which has significant growth rate. Look at
hospitality, hotels, construction, all of which are growing
above 12 per cent. Look at the solid minerals sector which we
had ignored because of oil, which holds significant
opportunities.”
Advising the Federal Government on austerity measures,
Agbaje noted that the outlook may be difficult and
challenging, which may gravitate the government towards
more borrowing, but cautioned that restraint should be
exercised not to return the nation to debt trap of the 1980s.
“Policy has to deliberately and aggressively cushion the poor
against harsh economic policies, otherwise, we will have
social cataclycism”, he said.